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et  de  haut  en  bas,  en  prenant  le  nombre 
d'images  n*cessaire.  Les  diagrammes  suivants 
illustrent  la  m*thode. 


by  errata 
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une  pelure, 
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6 

THE   ENGLISH   RAILWAY   RATE    QUESTION. 


The  chief  stages  in  English  railway  liistoiy  may  be  de- 
scribed as  follows :  — 

First.  There  was  the  period  of  doubt  and  siispicif)ii  as 
regards  the  national  advantage  and  probable  financial  suc- 
cess of  railways.  This  period  was  short.  It  really  ex- 
tended only  from  the  promotion  of  the  Liverpool  and 
Manchester  Railway  in  1824  until  about  1840.  Even 
while  it  endured  there  were  incipient  movements  towards 
governmental  encouragement  of  railway  enterprise ;  for 
Parliament  was  induced  to  grant  a  loan  to  the  Liverpool 
Railway  of  $500,000,  at  3i  per  cent,  interest, —  a  low  rate 
at  the  time.  Parliament  also  exempted  it  from  the  pas- 
senger tax  which  was  then  payable  by  stage-coaches. 
This  tax  was  practically  imposed  upon  the  railways  in 
1882;  but  the  terms  of  its  imposition  gave  the  railways 
an  advantage  over  stage-coaches  which  amounted  to  a 
not  inconsiderable  bounty.* 

Second.  The  great  change  in  the  attitude  of  Parliament 
and  the  public  towards  railways  came  about  in  the  second 
period,  wlien  '•  the  extreme  of  determined  rejection  or 
dilatory  acquiescence"  was  exchanged  for  "  the  opposite 
extreme  of  unlimited  concession."  f  This,  however,  is 
putting  the  case  rather  too  strongly.  The  concessions 
were  never  unlimited,  although  they  were  large.  Even 
at  that  time  the  powers  of  the  railway  companies  were 
defined  by  act  of  Parliament.  The  i)romoters  of  the  com- 
panies were  shrewd  enough  to  ask  not  for  vague  powers, 

•  Cf.  Thomas  Grahame,  Treatise  on  Inland  Intercourse  in  Civilized  States, 
18H,  p.lOGet  seq. 

t  Quoted  by  Herbert  Spencer,  "  Railway  Morals  anil  Kailwaya  Policy," 
Essays,  American  edition,  p.  205. 


THE  ENGLISH  RAILWAY  RATE  QUESTION        281 


—  for  vagueness  is  a  two-edged  weapon  in  a  statute, — 
but  for  large,  definite  powers.  For  example,  the  maxi- 
mum rates  for  which  they  asked  were  largely  in  excess  of 
what  they  intended  to  charge,  and  largely  in  excess  also 
of  what  they  did  charge  until  the  inflation  of  trade  in 
1870-74.  They  left  a  large  margin  for  contingencies, 
but  they  demanded  definite  powers.  Railway  enterprise 
was  encouraged  by  these  statutory  privileges ;  and  the 
increase  of  railway  dividends,  due  to  the  rapid  expansion 
of  traffic  and  the  relatively  high  rates,  produced  the  rail- 
way mania  of  1845.  The  railway  Acts  passed  during  this 
period  were  formed  upon  a  definite  model,  and  in  one  of 
the  clauses  of  this  model  Act  the  principles  of  equal  mile- 
age and  of  equal  treatment  were  laid  down.* 

The  Regulation  of  Railways  Act  of  1844  f  gave  powers 
to  the  Treasury  to  revise  the  scale  of  "tolls,  fares,  and 
charges"  of  any  railway  company,  when  the  dividends 
of  the  company  exceeded  10  per  cent.J  The  Railway 
Clauses  Act  of  1845  §  enabled  the  railway  companies  to 

•  "  The  rates  and  tolls  to  be  taken  by  Tirtue  of  this  Act  shall  at  all  times 
be  charged  equally,  and  after  the  same  rate  per  ton  per  mile  throughout  the 
whole  of  the  said  railway  in  respect  of  the  same  description  of  articles,  mat- 
ters, or  things,  and  that  no  reduction  or  advance  in  the  said  rates  and  tolls  shall, 
directly  or  indirectly,  be  made  partially  or  in  favor  of  or  against  any  particular 
person  or  company,  or  be  confined  to  any  particular  part  of  said  railway,  but 
that  every  such  reduction  or  advance  of  rates  and  tolls  upon  any  particular 
kind  or  description  of  articles  .  .  .  shall  extend  to  and  take  place  tliroughont 
the  whole  and  every  part  of  said  railway  .  .  .  and  shall  extend  to  all  persons 
.  .  .  using  the  same." 

See  copy  in  Grierson,  Railway  Rates,  English  and  Foreign,  1886,  Appen- 
dix, p.  Ixxi. 

t7&8  Vict.,c.  85. 

}  This  limitation  has  been  rather  scornfully  treated  by  critics  of  English 
railway  policy,  and  no  doubt  with  some  justice,  when  regarded  from  the  point 
of  view  of  more  recent  practices  of  stock-watering,  etc.,  which  must  render 
ineffectual  dividend  limitations  pure  and  simple.  In  1845,  however,  the  rail- 
way system  was  yet  in  its  raw  youth ;  and  the  anxiety  of  the  legislature  led  it 
to  the  adoption  of  any  feasible  plan  of  preventing  the  railway  companies  from 
assuming  the  position  of  monopolies.  The  limitation  must  be  judged  in  the 
light  of  experience  at  the  time  when  it  waa  enacted.  The  force  and  interest  of 
it,  apart  from  questions  of  the  easiness  of  evasion,  vary  with  the  dividends. 

§8«&  9  Vict.,  c.  20. 


282 


quartehly  journal  of  economics 


vary  the  tolls  upon  the  railway  "so  as  to  accommodate 
them  to  the  circumstances  of  tlie  traffic,"  thus  withdraw- 
ing the  "  equal  mileage  "  clauses  of  the  earlier  Acts.  The 
same  Act  re-enacted  the  prohibition  of  "prejudicing  or 
favoring  particular  parties." 

During  the  period  from  about  1840  until  1854  the  rail- 
way network  of  England  was  i)ractically  created.  It  is 
true  that  this  network  was  built  on  no  definite  plan,  that 
it  was  financed  on  no  very  sound  princii)les,  that  there 
was  much  chicanery  in  promotion,  and  much  mismanage- 
ment afterwards.  Yet  it  was  made,  and  made  q  lickly, — 
made  much  more  quickly,  perhaps,  than  it  cruld  have 
been  made,  had  any  other  system  been  adopted.  But  the 
want  of  a  plan,  besides  causing  great  waste  of  resources, 
resulted  in  discontinuity  of  lines.  Transference  of  traffic 
from  one  line  to  another  was  inconveniently  conducted, 
and  sometimes  even  wilfully  impeded.  Combination  or 
amalgamation  of  lines  became  both  a  public  necessity  and 
a  public  danger.  Parliament  endeavored  to  control  amal- 
gamations by  still  more  strenuously  defining  the  powers 
of  the  companies.  But  the  administration  of  such  laws 
is  always  liard;  and  the  mere  repetition  in  successive  Acts 
of  clauses  against  undue  preference,  etc.,  suggests  that  the 
clauses  in  the  earlier  Ac<^s  had  been  disregarded. 

Third.  In  order  to  obviate  the  inconveniences  referred 
to,  the  Railway  Traffic  Act  of  1854*  "was  passed,  with 
the  object  of  securing  facilities  for  through  or  other 
traffic "  and  "  equal  treatment  for  all  persons  and  arti- 
cles." t  This  act  probably  marks  the  beginning  of  effec- 
tive control,  ond  may  thus  be  held  to  indicate  the  begin- 
ning of  the  third  period.  During  this  period,  extending 
perhaps  from  1854  to  about  1870,  there  was  in  England  a 
struggle  in  railway  policy,  as  indeed  in  general  industrial 
policy,  between  a  tendency  towards  diminution  of  State 

•17&18  Firt.,  c.  31. 

t  See  Fourteenth  Report  Railway  Commiscioners,  1888,  p.  3. 


4<U->r- 


THE  ENGLISH  liAILWAY  RATE  QUESTIOX        283 


control  over  industry  and  commerce,  and  a  tendency 
towards  increase  of  tliis  control.  And  there  can  be  no 
doubt  that  the  Latter  tendency  won,  at  all  events,  for  the 
time. 

Fourth.  Tliis  victory  marks  the  beginning  of  the/o«r^/t 
period.  Until  about  1870  the  presumption  was  against 
State  and  municipal  control  of  any  public  service  which 
was  thought  capable  of  being  performed  by  private  en- 
terprise. From  that  date  the  presumption  has  been  quite 
the  contrary.* 

In  conformity  with  tlie  tendency  of  the  time  the  Rail- 
way Regulation  Act  of  18l!8  f  developed  the  system  of 
control.  The  greatly  increased  traffic  had  brought  into 
existence  conditions  which  could  not  have  been  foreseen, 
and  therefore  could  not  have  been  made  the  subject  of 
legislation  in  earlier  Acts.  Among  the  new  provisions  in 
the  Act  of  1868  was  one  upon  a  subject  of  which  more  will 
be  heard  later;  namely,  specification  of  charge.  Under 
Section  17  of  that  Act  the  railway  companies  were  bound 
to  furnish  pa"ticulars  of  the  charges  for  goods,  and  to 
differentiate  between  "conveyance  of  goods  on  the  rail- 
way, including  therein  tolls  for  the  use  of  the  railway,  for 
the  use  of  carriages,  and  for  locomotive  power,"  and  so 
much  of  the  charge  as  may  be  "  for  loading  and  unloading, 
covering,  collection,  and  delivery."  The  next  important 
stage  in  the  fourth  period  is  marked  by  the  Report  of  the 
Committee  of  1872,  and  the  consequent  legislation  of 
1873.  The  economical  conditions  of  the  time  must  be 
kept  carefully  in  view  in  examining  the  conclusions  of  this 
Report  as  well  as  in  weighing  the  evidence  given  before 
the  committee.  For  two  years  trade  had  been  advancing 
"by  leaps  and  bounds."     The  traffic  receipts  of  the  rail- 

*TIie  purchase  of  the  telegraphs  by  the  government,  1807-08 ;  the  General 
Tramways  Act  of  1H70,  which  gave  large  powers  to  muuicipalities ;  the  numer- 
ous gas  and  water  bills  promoted  by  municipalities, —  are  a  few  among  the 
many  manifestations  of  this  tendency  about  IH'O. 

1 31  &  32  Vkt.,  c.  119. 


N; 


284 


QUARTERLY  JOURNAL  OF  ECONOMICS 


way  companies  increased  20  j)er  cent,  between  1869  and 
1872.  Tlie  ijvoportion  of  nel  recei[)ts  to  capital  advanced 
from  3.91  per  cent,  in  1867  and  4.22  per  cent,  in  1869  to 
4.74  per  cent,  in  1872, —  a  point  which  they  have  never 
since  reached.  Rates  liad  gone  up  considcraliiy.  The 
railway  companies  were  doing  their  utmost  to  reap  a  full 
share  of  the  golden  harvest,  and  the  possibilities  of  their 
reaping  an  inordinate  share  did  not  appear  remote.  Thus 
there  naturally  arose  demands  for  legislative  interference 
to  prevent  the  railways  from  taking  an  excessive  advan- 
tage of  the  powers  over  inland  transport  which  amalgama- 
tion had  secured  to  them. 

In  the  discussions  before  the  legislation  of  1873  it  was 
the  interest  of  both  parties  in  the  controversy  to  minimize 
the  effect  of  previous  legislation.  The  traders  adopted 
this  attitude  because  they  wanted  new  and  more  strin- 
gent acts,  and  they  had  to  show  that  tlie  exl.;ting  acts 
were  inadequate ;  and  the  railway  companies  had  to  show 
that  all  legislation  of  a  restrictive  kind  was  useless  and 
pernicious.  These  dialectical  expedients,  to  which  the 
commissioners  of  1872  fell  easy  victims,  ought  not,  how- 
ever, to  betray  us  into  the  belief  that  the  legislation  up 
to  1873  was  wholly  futile.  It  is  difficult  to  believe  that 
the  railway  system  would  have  or  could  have  safely  de- 
veloped with  greater  rapidity ;  and  it  would  be  diihcult 
to  prove  that  any  other  policy  could  wisely  have  been 
adopted  than  that  which  retained  the  general  principle 
in  all  Acts,  that  a  railway  company  was  wholly  a  creature 
of  statute,  and  that  special  conditions  should  be  legislated 
for  as  they  emerged. 

From  1854  until  1872  the  railway  companies  were 
obviously  not  allowed  to  do  as  they  pleased,  but  tliey 
were  given  extensive  powers.  To  call  this  system  laiasez- 
faire  is  to  misapply  the  expression.*     It  is  rather  a  sys- 

•  Of.  Adams,  Railroads,  their  Origin  and  Problems,  p.  94,  for  a  contrary 
opinion. 


a 


THE  ENGLISH  RAILWAY  HATE  QUESTIOX        '285 

tern  of  litnited  ownership  and  conti()lle<l  udnunisti  tion. 
The  English  railway  policy  lias  l)een  of  this  nature  from 
the  beginning ;  as  we  shall  see  from  its  more  recent  his- 
tory, it  has  been,  for  good  or  evil,  a  policy  of  progressive 
intensification  of  control.  Whether  the  policy  is  justifi- 
able or  not  on  abstract  grounds,  the  railway  companies 
have  never  been  free  from  the  leash  of  the  State,  and  are 
now  more  constrained  bv  it  than  ever.  Nor  has  the 
policy  as  disclosed  by  the  statutes  been  wholly  ineffective. 

The  impetuous  conclusion  of  the  Committee  of  1872,  to 
the  effect  that  English  legislation  had  never  accomplished 
anything  v/hich  it  sought  to  bring  about  or  prevented 
anything  which  it  sought  to  hinder,  is  a  piece  of  rhetorical 
exaggeration  which  ia  responsible  foi*  much  misunder- 
standing of  the  English  system.  The  same  phrase  is 
applied  by  Mr.  Herbert  Spencer  to  all  legislation,  and  is 
perhaps  in  some  measure  true  as  a  general  statement ;  but 
it  has  no  peculiar  application  to  railway  law.  The  com- 
mittee were  judging  the  existing  legislation  in  the  light  of 
the  situation  in  1872,  and  were  not  taking  into  account 
the  general  history  of  English  railway  policy.  No  doubt 
each  s*^ep  had  been  looked  upon,  when  it  was  made,  as  the 
final  one.  But  this  error  is  not  peculiar  to  railway  his- 
tory, cand  it  is  not  matter  of  surprise  that  the  lapia  growth 
of  the  railway  system  should  have  brought  frequent  need 
for  amendments  to  the  original  legislation. 

The  main  point  in  the  discussions  of  1872-73  was  the 
question  of  "  undue  preference."  This  was  an  old  ques- 
tion :  it  had  been  dealt  with  in  every  Act,  yet  it  ap- 
peared in  full  vigor  before  the  Committee  of  1872.  The 
reason  is  not  far  to  seek.  Railway  rates  had  been  com- 
paratively stationary  for  som  •  years,  until  the  expansion 
of  trade  brought  a  movement  of  general  rates  upwards. 
Even  if  the  railway  companies  had  not  entertained  the 
sinister  design  of  taking  a  high  rate  wherever  they  could 
get  it.  and  of  disregarding  the  explicit  prohibition  in  these 


V 


•■%;■: 


2S0 


qUAUTKULY  JOVliyAL   OF  ECONOMICS 


Acts  of  Parlianipnt,  tliL'io  would  still  have  been  room  for 
the  exisl;Mice  of"uiulue  inot'erences,"  iUid  for  giiimbling 
about  tlioni  whether  they  existed  or  not.  It  is  small 
wonder,  tlierefore,  that  the  cr}'  of  "undue  i)reference8" 
should  have  been  the  leading  one  at  this  ])eriod.  I'erhaps 
the  suggestion  imidies  too  great  astuteness  on  the  part  of 
the  railway  managers;  but  it  may  be  that  they  saw  the 
advantage  of  accepting  as  the  issue  of  the  inevitable  battle 
bet^veeu  the  railways  and  the  public,  so  comparatively 
trivial  an  issue  as  "  undue  preference."  Whether  or  not 
this  was  their  intention,  it  is  clear  that  the  selection  of 
this  issue  for  the  fight  of  1872-73  led  to  the  postpone- 
ment for  nearly  twenty  years  of  the  much  more  serious 
discussion  in  regard  to  the  regulation  of  railway  rates. 
The  principal  outcome  of  the  legislation  of  1873  was  the 
establishment  of  a  new  tribunal  to  try  railway  causes. 
The  Railway  Commissioners'  Court  was  avowedly  an  ex- 
periment.* It  has  probably,  on  the  whole,  fulfilled  its 
function.  Appeal  to  it  is  not  much  less  expensive  to 
litigants  than  appeal  to  the  ordinary  law  courts,  but  its 
existence  has  no  doubt  exercised  an  important  check  upon 
the  giving  of  "  undue  preferences."  In  recent  discussions 
on  railway  management  the  question  of  individual  dis- 
criminations haa  dropped  out  of  the  field.f 

The  settlement  effected  by  the  Act  of  T873  was  not 
disturbed  until  about  1880,  when  the  question  ot  differ- 
ential rates, —  or  of  unequal  mileage  rates, — of  low  rates 
for  long-distance  traffic  and  relatively  high  rates  for  short- 
distance  traffic  (the  short-haul  question),  emerged  in  cases 
before  the  Commissioners  and  also  before  the  law  courts. J 

•Professor  Hiidley's  criticism  (Tiailroad  Transportation,  p.  177)  seems  to 
me  quite  just,  Tiie  Railway  Commission  is  neitlier  a  couspicuous  success  nor 
a  conspicuous  failure. 

t  A  useful  summary  of  important  decisions  is  given  by  Professor  Iladley, 
Railroad  Transportation,  p.  183. 

}  Especially  Budd  v.  London  iS-  North-Western  liailivay,  .'iO  L.  T.,  N.  S., 
p.  802,  and  Denaby  Colliery  Co.  v.  Manchester,  Sheffield  i(j-  Lincoln  Bailway, 
Seventh  Report  Railway  Commissioners,  p.  !>. 


TIIK  KydLlSIl  IIMLWAV  KATE  QUKSTION        287 


Accovilinjj  to  decisions  in  these  cases,  differential  rates 
were  illegiil ;  aii<l  tlie  result  was  an  agitation  mainly  in 
the  interests  of  I  lie  traders  whose  trallic  was  purely  local. 
The  Select  C'onunittee  of  1X81-82  was  therefore  ap- 
pointed to  deal  with  this  aspect  of  the  ([uestion  of  dis- 
criminatory rates.  From  the  first  it  was  evident  that 
this  committee  would  arrive  at  nothing.  It  was  too  large 
an(.  heterogeneous  for  serious  intjuiry  into  a  highly  com- 
plicated problem.  The  coniniitteo  defended  ditt'erential 
rates  against  the  adverse  jiulgment  of  the  law  courts,  but 
recommended  no  legislation, —  a  futile  proceeding,  which 
left  the  rates  question  in  a  worse  muddle  than  ever.  This 
was  soon  made  i  ident  in  tlie  renewed  agitation  which 
took  place  almost  . mm '^d lately  after  the  report  was  issued. 

Fifth.     Tills  agi  I  did  not  devote  itself  to  the  ab- 

stract question  c  iminatory  rates,  but  was  directed 

towards  an  sill-round  .  d action  of  rates.  "The  subject 
of  differential  rates  became  really  a  subordinate  one.  It 
was  the  question  of  erorhitnnt  rates  that  most  agitated  the 
public  mind."  *  The  agitation  and  its  results  cover  the 
ffth  stage  of  English  railway  history. 

The  beginning  of  the  period  extending  from  1873  until 
1878-79  was  a  period  of  high  prosperity :  the  end  was 
a  period  of  depression.  In  1880-81  there  was  again  a 
revival;  in  1882  trade  was  brisk;  but  in  1883-84  began 
the  period  known  as  the  Great  Depression,  which  reached 
its  lowest  point  in  1886.  These  occurrences  have  been 
recited  because  it  is  impossible  to  dissociate  attacks  upon 
the  railways  by  the  public  from  the  general  economic 
movement.  The  inflation  of  trade  had  led  to  increase  of 
rates,  and  now  the  depression  of  trade  led  to  demands  that 
they  should  be  decreased.  Clamor  for  reduction  of  rail- 
way rates  was  coincident  with  the  fall  of  prices.  But,  in 
order  to  meet  the  exi)anding  traffic  during  the  period  of 

*  An  inversion  of  a  statement  by  Professor  Hadley  regarding  the  previous 
period.  The  whole  situation  had  altered  by  the  time  Professor  ILidley's  book 
was  in  the  press.     Cf .  liailroad  Transportation,  p.  IHO. 


L'H8 


(irAtriruLY  .loviiSAL  of  txosoMivs 


iiilliUion,  the  railway  cMiiiiiiiiuics  hud  oxpt'iidcd  j^'iriit  stuns 
ill  extrusions,  and  esiicrially  in  stations  in  tiio  lar<,''e  cen- 
tres of  [i()|Mdation.  Miieli  of  tiiis  a(hlitional  capital  was  as 
yet  unreuuiiierative  or  not  fidly  lemuiiemtive.  The  pro- 
portion  of  net  receipts  to  total  paid  uj)  cajiital  fell  from 
4.74  per  cent,  in  1H72  to  4.1')  pcu-  cent,  in  187!».  It  mso  to 
4.29  per  cent,  in  1S8?..  and  fell  to  i.K)  jier  cent,  in  1884, 
to  4.02  per  cent,  in  188;'),  and  to  8.1»9  per  cent,  in  1886. 
The  traders  were  fcelinj;  the  pinch  of  the  times,  and,  in 
face  of  a  diniiiiishiiig  volume  of  business  and  diminishing 
amount  of  prolits,  were  anxious  to  obtain  reduction  in  rail- 
way rates ;  while  for  the  same  reasons  the  railway  compa- 
nies were  anxious  to  keep  them  up.  In  1884  the  railway 
companies  embarked  in  a  policy  which,  from  a  tactical 
point  of  view,  was  very  (piestionable,  and  was  necessarily 
unsuccessful.  Their  rates  in  many  cases  already  ap- 
proached the  maximum  rates,  and  they  knew  that  it  was 
fvitile  to  attempt  to  induce  Parliament  to  increase  these 
maximum  rates;  but  they  determined  to  make  use  of  the 
argument  that  they  had  expended  large  sums  upon  ter- 
minal facilities,  in  order  to  obtain  legislative  sanction  for 
charging  separately  for  these  terminals.  The  policy  was 
inexpedient,  because  it  raised  a  question  which  it  was  not 
for  the  interest  of  the  railway  companies  to  raise ;  and  it 
was  defeated  because  of  the  overwhelming  opposition  of 
the  traders.  Moreover,  the  battle  was  a  useless  one.  It 
need  never  have  been  fought.  The  railway  companies 
had  the  power  to  charge  for  terminals,  aiid  had  been 
habitually  charging  for  them.  It  is  true,  this  proceeding 
was  called  in  question ;  but  in  1885  the  decision  in  the 
case  of  Hall  v.  The  London,  Brifihton  &  South  Coaxt 
Bailway,*  in  the  special  case  brought  before  the  Court  of 
the  Queen  o  Bench  on  the  instructions  of  the  Railway 
Commissioners,  settled  the  law  of  the  question  in  favor 
of  the  railway  companies.     It  was  held  that  they  had  un- 

*  Lair  lieports,  Qiuen's  Jknch  Division,  vol.  xv.  p.  r)05. 


TUE  KXOLrsil   ItAILWAY  RATE  (iUKSTlON        i»8U 


limited  powers  to  cliai'|j;u  "ii  rensoimblo  sum,"  and  for  the 
deteninmUion  of  what  (u)ii.stitiited  a  reasoiiahli-  sum  there 
was  iKitliiiin'  hut  thi!  coiiimon-hiw  machinery.  lu  asking 
i'or  dt'linite  powers,  it  is  clear  that  they  much;  a  mistake. 

The  Report  of  the  Iloyal  Commission  on  Depression  of 
Trade  affonls  a  consideralde  amount  of  evidence  upon  the 
vi(!ws  of  tlie  traders  in  rcfraid  to  railway  rates  durini; 
the  depression.  There  Ciiu  he  no  douht  tlial  the  traders 
were  irritated  by  the  fall  in  prices  and  the  al)8en('e  of  a 
corresi»onding  redui'tion  in  the  cost  of  transport.* 

The  shelvinjf  of  the  problem  by  the  Committee  of 
l.s.sl-82,  the  failure  of  the  railway  companies  to  carry 
their  jjroposals  through  I'arliument,  and  the  increasing 
complexity  of  the  rateij^ system,  due  to  the  development  of 
dilTi'rential  tariffs,  had  l)rout>lit  the  railwiiy  system  into  a 
condition  of  chaos.  No  doubt  the  traders  exaggerated  the 
diilicuUies  of  the  situation,  but  it  is  certain  that  it  had 
become  too  highly  complex  for  the  conservative  and  in- 
dolent mind  of  the  English  trader.  He  did  not  know 
what  he  was  to  be  charged  for  the  goods  he  desi)atched, 
and  he  objected  to  terminals  which  he  did  not  understand 
und  to  which  he  affected  to  be  unaccustomed. 

The  mere  evolution  of  industry  contributed  to  this 
confusion.  The  Clearing-IIouse  Classification  had  grown 
by  accretion  until  it  reached  4,000  items :  the  rates  had 
multiplied  until  they  became  hundreds  of  millions.  Some 
simplitication  appeared  advisable,  and  the  Government 
was  ultimately  induced  to  undertake  it.  Besides,  it 
seemed  that  action  of  some  kind  was  necessary  to  relieve 
the  pressure  upon  tlie  miscellaneous  trades,!  which  were 
suffering  from  the  depression  and  were  powerful  enough 
to  make  their  clamor  heeded;  while,  on  the  other  hand, 
railway  interests  were  no  longer  so  formidable  in  Parlia- 

*k5ee  below,  p.  2!)4. 

t  On  the  development  of  the  niiseellaneous  trades  at  this  time,  see  Mr. 
Giffen's  Address  to  Section  F,  British  Association,  1887. 


i< 


290 


QUARTERLY  JOURNAL   OF  ECOyOMICS 


raent  as  once  they  were.*  Therefore,  tlie  government 
(Lord  Salisbury's)  brought  in  and  carried  the  Railway 
and  Canal  Traffic  Act  of  ISSS.f  This  Act  practically 
intrusted  the  Board  of  Trade  with  the  formulation  of 
;i  thorough-going  revision  alike  of  classification  and  of 
rates.J  ^t  also  reorganized  the  Railway  Commission, §  en- 
dowed the  Board  of  Trade  with  the  privileges  of  a  "  can- 
did friend "  of  the  railways  and  of  the  traders  alike, 
entitling  it  to  receive  complaints  from  traders,  and  to 
confer  with  the  railway  managers  on  the  subject  of  these 
complaints,  without,  however,  giving  the  Board  any  magis- 
terial powers  regarding  either  the  railways  or  the  traders 
in  these  matters.  ||  These  complaints  were  to  be  made 
the  subject  of  annual  reports  to  Parliament.  The  rail- 
way companies  were  also  required  to  render  to  the  Board 
of  Trade  such  statements  as  the  Board  might  from  time 
to  time  prescribe.^ 

In  undertaking  the  revision  of  the  classification  and  the 
maximum  rates,  the  following  procedure  was  prescribed : 
Every  railway  company  was  required  to  submit  to  the 
Board  of  Trade  "a  revised  classification  of  merchandise 
traffic,  and  a  revised  schedule  of  maximum  rates  and 
charges  applicable  thereto,  proposed  to  be  charged,"  and 
to  state  fully  "the  nature  and  amounts  of  all  terminal 
charges  proposed  to  be  authorized  in  respect  of  each  class 
of  traftic,  and  the  circumstances  under  which  such  termi- 
nal charges  are  proposed  to  be  made.  In  the  determina- 
tion of  the  terminal  charges  of  any  railway  company 
regard  shall  be  had  only  to  the  expenditure  reasonably 
necessary  to  provide  the  accommodation  in  respect  of 
which  such  charges  are  made,  irrespective  of  the  outlay 
which  may  have  been  actually  incurred  by  the  railway 
company  in  providing  that  accommodation."** 

*Fiimn(;iitl  Reform  Almanac,  ISdl,  p.  I'-'H.  151  &  Tt'i  Vict.,  c.  25. 

t  Ibid.,  Part  II.,  §§  24-;'.().         §  Ibid.,  Part  I.,  §j  'J-'.';!.         li  Ibid.,  §  31. 
1i  Ibid.,  §  ;i'.'.  *»  Ibid.,  §  24,  subsection  1. 


THE  ENGLISH  RAILWAY  RATE  QUESTION        291 


The  classification  and  schedule  were  to  be  submitted 
within  six  months, —  extensions  of  time  being  granted  in 
certain  cases, —  and  then  they  were  to  be  open  to  examina- 
tion and  objection  by  all  those  whom  the  Board  of  Trade 
considered  entitled  to  be  heard.  After  having  heard  the 
evidence  and  formulated  its  classification  and  schedule  of 
rates,  the  Board  of  Trade  was  instructed  to  endeavor  to 
come  to  an  agreement  upon  these  with  the  railway  com- 
panies. Should  no  agreement  be  arrived  at,  the  Board  of 
Trade  was  itself  to  determine  what  was  "just  and  reason- 
able," and  to  embody  this  in  a  report.  This  report  was  to 
be  presented  to  Parliament,  and  after  the  lapse  of  a  recess 
the  i)roposals  contained  in  this  report  were  to  be  submitted 
to  Parliament  in  the  form  of  Provisional  Order  Bills.  No 
agreement  could  be  arrived  at  between  the  Board  of  Trade 
and  the  railways.  "Everybody  was  dissatisfied,"  and 
the  board  adopted  the  course  prescribed  in  the  Act.  This 
inquiry  was  held  in  1889-90  by  Lord  Balfour  of  Burleigh 
and  Mr.  (now  Sir)  Courtenay  Boyle,  on  behalf  of  the 
Board  of  Trade,  in  the  Westminster  Town  Hall.  The 
inquiry  lasted  for  eighty-five  days ;  and  an  enormous  mass 
of  evidence,  filling  eleven  volumes,  was  received.  The 
report  to  the  secretary  of  the  Board  of  Trade  by  the  two 
gentlemen  named  constituted  the  classification  and  sched- 
ule whiwh  they  recoruniended  as  "fair  and  reasonable." 
This  classification  and  schedule  were  afterwards  embodied 
in  a  set  of  Provisional  Orders.  Although  the  classifica- 
tion was  uniform,  and  the  schedules  of  rates  were  nearly, 
though  not  quite  alike,  each  railway  company  was  legis- 
lated for  by  a  separate  Provisional  Order  Bill.  These 
Provisional  Order  Bills  were  then  presented  to  Parlia- 
ment. They  were  not  promoted  by  the  Board  of  Trade, 
but  were  held  to  follow  upon  the  act  of  1888.  After 
passing  the  second  reading,  they  were  remitted  to  a  Joint 
Committee  of  the  House  of  Lords  and  the  House  of  Com- 
mons ;    and   in   the   inquiry   before   that  committee   the 


!^ 


292 


QUARTERLY  JOURNAL  OF  ECONOMICS 


T  ■ 


[*.■ ' 


whole  subject  was  threshed  out  once  more.  The  com- 
raittee  sat  tor  forty-two  days,  and  heard  counsel  and  evi- 
dence upon  all  the  points,  and  made  several  important 
amendments  to  the  bills.  Finally,  the  bills  reappeared  in 
Parliament,  where  they  were  further  amended ;  *  and 
after  three  years  of  close  discussion  the  revised  classifi- 
cation and  rates  became  law  on  July  24,  1891,  although 
the  changes  were  not  to  take  effect  until  August  1,  1892.t 

II. 

My  purpose  now  will  be  to  attempt  to  disentangle  from 
the  enormous  mass  of  evidence  some  illustrations  of  the 
chief  among  the  contested  points  in  the  theory  of  railway 
rates. 

It  seems  necessary  to  say  a  preliminary  word  about  the 
manner  in  which  tho  Board  of  Trade  and  the  Joint  Com- 
mittee of  1891  have  conducted  this  inquiry,  and  have  car- 
ried into  effect  the  conclusions  at  which  they  have  arrived. 

Whatever  may  be  the  opinion  as  to  the  effectiveness  of 
the  legislative  fixation  of  maximum  rates  or  as  to  the  ad- 
visability on  abstract  grounds  of  control  over  private  en- 
terprises being  intrusted  to  government  departments,  no 
one  who  watched  the  course  of  the  three  years  of  contro- 
versy from  1888  till  1891  could  fail  to  be  impressed  with 
the  acuteness  and  fairness  with  which  both  the  Joint  Com- 
mittee and  the  Board  of  Trade  approached  the  subject,  as 
well  as  with  the  comprehensiveness  and  thoroughness  of 
their  examination  of  it.  The  revision  of  the  maximum 
rates  was  a  work  which  could  be  expected  to  bring  no 
gratitude.  The  railways  were  certain  to  be  dissatisfied, 
if  the  traders  were  pleased;  and,  if  some  traders  were 
pleased,  others  were  certain  to  be  dissatisfied.  The  arbi- 
ters among  the  rival  interests  were  likely  to  olTend  them 
all. 

* Hamard,  Scries  III.,  vol.  .'Wi,  cols.  2(i9  et  seq. 

t  The  date  was  afterwiirds  extended  to  January  1,  1893. 


THE  ENGLISH  RAILWAY  RATE  QUESTION        293 


It  is  quite  certain,  nevertheless,  that  the  method  of  re- 
vision of  niaxinmni  rates  has  had  a  fair  trial.  The  issue 
may  be  unfortunate  from  causes  external  to  the  railway 
system  pure  and  simple,  or  from  some  inherent  defect  in 
the  principle,  or  from  lack  of  judgment  or  temper  on  the 
part  of  the  railway  managers  or  the  traders ;  but  it  is 
unlikely  that  any  more  impartial  investigation  into  the 
special  condiiions  applicable  to  railway  rates  in  England 
will  be  undertaken  in  our  time. 

Although  railway  companies  frequently  quarrel  with 
each  other,*  when  the  question  is  one  of  demand  for 
general  reduction  of  rates,  they  stand  together.  Traders, 
on  the  other  hand,  are  unaccustomed  to  united  action. 
Their  interests,  as  opposed  to  those  of  the  railway  com- 
panies,  although  in  a  superficial  view  identical,  are  really 
very  divergent.  It  is  the  interest  of  the  large  trader  to 
get  low  rates  for  truck-loads  or  for  train-loads,  whereas  it 
appears  to  be  the  interest  of  the  small  trader  to  prevent 
the  large  trader  from  getting  differential  rates  for  large 
quantities.  It  is  to  the  advantage  of  the  trader  who  sends 
his  goods  to  a  distant  market  to  obtain  low  rates,  while 
the  small  trader  with  whom  he  is  competing  in  the  distant 
market  looks  upon  low  long-distance  rates  as  an  evil.  It 
is  to  the  advantage  of  certain  traders  in  timber  to  have 
their  goods  charged  by  weight,  while  for  other  traders  in 
the  same  commodity  it  is  an  advantage  to  have  them 
charged  by  measurement.  It  is  to  the  advantage  of  some 
traders  to  have  a  system  of  charges  which  involves  de- 
tailed specification  of  charge,  since  an  individual  trader 
may  prefer  to  render  for  himself  some  of  the  services 
which  a  railway  company  customarily  renders ;  while 
others  object  to  specific  charges  as  being  equivalent  to  an 

•The  time  of  the  Railway  Commissioners  is  largely  occupied  with  the 
quarrels  of  railway  conipaniea.  In  ISSli,  11  out  of  12  cases  before  them  were 
cases  of  railway  against  railway ;  in  1S87,  G  out  of  V2  ;  in  18.S9,  3  out  of  11  j  in 
189(),  7  out  of  28 ;  and,  in  18i)l,  1  out  of  10.  Annual  Reports  of  the  Railway  and 
the  Railway  and  Canal  Commission  for  these  years. 


I 


I 


fi 


1.'  ' 


294 


QUARTERLY  JOURNAL  OF  ECONOMICS 


V, 


t  ;  ; 


attempt  to  extort  additional  rates.  Here  is  a  sufficient 
divergence  of  interests  at  the  outset  to  puzzle  the  most 
benign  and  patient  tribunal.  Behind  these  more  or  less 
reasonable  differences  of  opinion  were  various  forms  of 
unreasonable  demands.  It  was  obvious  that  a  series  of 
compromises  must  be  effected ;  and  it  was  equally  obvious 
that,  on  any  principle  of  averaging,  some  must  be  levelled 
up  if  others  were  to  be  levelled  down.  These  considera- 
tions did  not  at  first  enter  into  the  representations  of  the 
traders.  Revision  of  rates  must  mean  for  them  reduction 
of  rates:  revised  classification  must  mean  that  "no  article 
should  be  rated  higher  than  it  is  at  present."  *  Lord  Bal- 
four of  Burleigh  truly  remarked  that  a  classification  and 
schedule  would  have  to  be  devised  which  would  "  satisfy 
the  most  unreasonable  of  unreasonable  people." 

It  is  not  easy  to  find  any  definite  principle  which  the 
Board  of  Trade  consistently  followed  either  in  the  classi- 
fication or  in  the  schedule  of  rates.  Sometimes  it  would 
appear  as  though  the  principle  of  "  what  the  traffic  would 
bear,"  and  sometimes  as  though  "  cost  of  service,"  were 
the  basis.  What  was  really  done  was  to  take  the  clear- 
ing-house classification  and  the  existing  maximum  rates, 
and  deal  with  them  in  a  purely  empirical  fashion.  The 
principle  adopted  was  avowedly,  and  perhaps  under  the 
circumstances  unavoidably,  the  rule  of  thumb.f  It  is  the 
general  method  of  English  legislation  to  effect  a  series 
of  compromises  without  troubling  about  consistency  in 
underlying  theories. 

As  the  Board  of  Trade  conceived  its  duties,  three 
things  had  to  be  done :  "  (1)  The  codification  and  reduc- 
tion into  order  of  the  immense  mass  of  scattered  provi- 

*"  First  Principle  of  Classification,"  in  the  statement  made  on  behalf  of 
the  British  Iron  Trade  Association.  Hoard  of  Trade  Inquiry,  March  I'J,  1890, 
Statement,  etc.,  London  [IMK)],  p.  19. 

tMr.  Courtenay  Boyle,  statement  for  the  Board  of  Trade.  Report  from 
the  Joint  Select  Committee  of  the  House  of  Lords  and  Ilnusr:  of  Commons  on  the 
Railway  Rates  and  Charges  Provisional  Order  Bills,  18'ji. 


IH 


THE  ENGLISH  RAILWAY  RATE  QUESTION        295 

sions  relating  to  the  charging  powers  of  the  companies ;  * 
(Si)  the  revision  of  the  existing  maximum  charges;  and 
(3)  it  was  necessary  in  respect  to  some  matters,  particu- 
larly terminals,  that  charges  which  had  not  previously 
been  fixed  and  defined  should  for  the  future  be  fixed  and 
defined."  f  The  intention  of  the  Board  of  Trade  was 
therefore  to  simplify  the  existing  complexity  of  rates, 
and  to  make  exhaustive  specifications  of  what  the  railway 
companies  might  charge. 

This  was  the  interpretation  tlie  Board  of  Trade  put 
upon  the  instructions  of  the  Act  of  1888.  The  railway 
companies  argued,  or  seemed  to  argue,  that  the  sole  duty 
of  the  Board  of  Trade  was  codification,  while  the  traders 
seemed  to  argue  that  the  sole  duty  of  the  Board  was  re- 
duction of  rates. 


III. 

A  commentary  on  the  principal  points  which  emerged 
in  the  course  of  these  prolonged  discussions  falls  natu- 
rally into  the  following  heads :  — 

A.  The  demand  for  specification  of  the  ingbe- 

DIBJSTTS   OF   CKAKGE. 

B.  Terminal  charges:  («)  Station  terminals;  (5) 
Service  terminals. 

C.  Conveyance  chaeciks:  (a)  Use  of  road;  (6) 
Use  of  locomotive  power;    (<?)  Use  of  wagons. 

D.  Classification:  (a)  As  regards  conveyance 
charges ;    (?*)  As  regards  terminal  charges. 

•  "  They  had  to  codify  about  1,200  Acts  of  Parliament."  Mr.  Stanhope,  in 
the  House  of  Commons.  Hansard,  July  2t,  18i)l.  This,  however,  does  not  by 
any  means  represent  the  extent  of  the  English  Acts  regulating  the  railway 
companies.  The  Loudon  &  Xorth-Western  Railway  Company,  e.g.,  had  its 
Acts  codified  by  a  parliamentary  barrister  about  ten  years  ago.  At  that  time 
the  company  was  working  under  upwards  of  1,()(X)  Acts,  including,  of  course, 
all  the  Acts  of  tlie  subsidiary  lines  which  it  had  absorbed. 

tMr.  Muir  Mackenzie,  statement  for  Board  of  Trade.  Provisional  Order 
Bills'Iieport,  18<J1,  Part  I.,  p.  lU. 


296 


qUARTERLY  JOURNAL  OF  ECCNOMWS 


ut\ 


\\ 


I  ^ 


I ; 


•1 


A.  The  demand  for  specification  of  the  ingredients  of 
charge  ajipears  continually  in  the  traders'  arguments,  and 
is  indeed  mildly  admitted  by  the  railway  companies.* 
The  ground  of  the  demand  is  that  the  trader  ought  to 
know  for  what  he  is  pajing  and  how  much  he  is  paying 
for  it.  There  may  bo  some  part  of  the  service  which  the 
railway  company  offers  which  he  is  prepared  to  render  for 
himself ;  but  he  does  not  know  whether  it  is  Avortli  while 
to  do  so,  unless  he  can  ascertain  exactly  what  the  railwaj' 
company  is  charging  for  the  particular  service  in  question. 

In  order  to  understand  conditions  which  have  not  sprung 
into  existence  in  a  day,  but  have  their  roots  in  the  past, 
one  must  continually  refer  to  ancient  history ;  and  Mr. 
Justice  Wills  was  indubitably  right  when  he  said  that 
'•  the  notion  of  the  railwaj'  being  a  highway  for  the  com- 
mon use  of  the  public,  in  the  same  sense  that  an  ordinary 
highway  is  so,  lies  at  the  starting-p'  nt  of  English  railway 
legislation."!  This  notion  underlies  the  Acts  of  1845 J 
and  1873  §  alike.  It  underlies  the  provision  in  the  latter 
Act  by  which  the  company  is  obliged  to  give  details  of 
rate  ;  §  and  it  has  also  formed  the  ground  of  various  deci- 
sions of  the  Railway  Commissioners  ||  and  of  the  law 
courts.^  The  intention  of  the  Act  of  1888  **  was  clearly 
to  emphasize  this  historical  provision.  The  reason  for  the 
maintenance  of  a  provision  which  to  some  seems  archaic 
is  very  obvious,  when  we  consider  the  English  railway 
situation.     The  Midland  and  North-Eastern  Railway  Com- 


■*■/ 


*As,  e.g.,  by  Mr.  Biddor,  Q.C.,  for  the  railway  companies.    Provisional 
Order  Bills  Report,  18'.>1,  Part  I.,  p.  70. 

t  Law  Reports,  Queen's  Bench  Division  (1884-8.")),  vol.  xv.  p,  530. 

t  8  &  9  Vict.,  c.  20,  §§  8(;-lll.  §  3()  A-  37  Vicl.,  c.  48,  §  14. 

II  -E'.fir.,  Thirteenth  Report  Railivdy  Commissioners  (188(1),  pp.  (i  and  30. 

'{.E.g.,  Hall  V.  London,  Brighton  i\'  South  Coast  Railway,  L.  R.,  Q.  B.  1)., 
vol.  XV.  p.  530. 

**  Sect.  '£i.    Cf.  also  Mr.  Coiutenay  Boyle's  statement.   Provisional  Order 
Bills  Report,  1891,  Part  I.,  p.  221. 


THE  ENGLISH  RAILWAY  BATE  QUESTION        297 


to 


panies  are  practically  the  only  English  companies  which 
own  their  own  mineral  trucks.*  The  mineral  trucks  on 
other  lines  are  almost  entirely  owned  by  traders.  Again, 
some  traders  do  not  use  the  stations  of  the  companies,  but 
have  sidings  of  their  own,  which  they  are  entitled  to  have 
if  they  choose  to  pay  for  them;  and,  having  paid  for  sid- 
ings, they  do  not  expect  to  be  called  upon  to  -pay  also 
for  the  stations  which  they  do  not  use.  Such  traders 
clearly  want,  and  of  course  have  had,  as  matter  of  practice, 
rates  lower  than  the  total  rates,  which  included  services 
of  which  they  did  not  avail  themselves.  Another  equally 
important  reason  for  specification  of  charge  lies  in  the  cir- 
cumstance that,  as  regards  general  merchandise,  the  Eng- 
lish railways  are  not  alone  "  conveyers  "  of  goods,  but  are 
also  "  carriers  "  ;  that  is,  they  undertake  the  business  of 
"common  carriers,"  —  they  collect  and  deliver.  It  may 
or  may  not  be  convenient  or  desirable  that  the  trader 
should  intrust  the  collection  and  delivery  of  his  goods 
to  the  railway  company ;  and,  if  he  does  not  do  so,  it  is 
argued  that  he  ought  not  to  be  charged  for  a  service  which 
is  not  performed  for  him. 

The  extent  to  which  this  splitting  up  of  rates  may  use- 
fully be  carried  was  actively  discussed  during  the  contso- 
versy ;  and  the  view  adopted  by  the  Board  of  Trade^was 
that  the  splitting  up  should  be  carried  out  exhaustively, 
so  that  there  should  be  no  room  for  any  other  charges 
than  those  specified.  The  traders  also  desired  that  a 
clear  and  broad  line  should  be  drawn  as  to  what  charges 
the  railway  company  may  legally  make.f 

There  were  thus  two  elements  in  this  demand  for  speci- 


•  The  latter  company  has  owned  all  its  mineral  trncks  for  many  years  ;  but 
the  former  only  began  the  policy  of  acquiring  trucks  in  IHKl,  when  00,0(K)  or 
70,000  trucks  were  purchased  from  tlie  traders  on  the  system  at  a  cost  of  about 
$it,0OO,(KX).  See  Report  above  quoted,  pp.  Sni,  L',-)2,  and  258,  Queries  1179  and 
1195. 

tMr,  Woodfall  for  the  Marquis  of  Bute  as  trader.  Provisional  Order  Bills 
Report,  1891,  Part  I.,  p.  70. 


208 


QUARTERLY  JOURNAL  OF  ECONOMICS 


fication  of  charges.  One  was  that  a  specific  cliarge  sliould 
be  made  for  each  individual  service,  and  the  other  that 
these  cli  irgcs  should  be  iixcd,  and  not  be  subject  to 
lluctuation.  Here  a  curious  question  emerged.  It  was 
clear  that,  if  tlie  charge  was  to  be  fixed  under  the  Pro- 
visional Order  of  the  Board  of  Trade,  the  trader  might  be 
at  the  mercy  of  the  Uoard,  since  at  that  particular  stage  of 
the  proceedings  the  ijiutnliiin  of  none  of  the  charges  was 
fixed.  It  was  therefore  i)roposed,  in  several  instances  of 
this  specification,  to  ])rovide  for  'xn  appeal  to  arbitration, 
the  arbitration  to  be  conducted  by  a  nominee  of  the  Board 
of  Trade.  Here,  however,  the  railwaj'  companies  stepped 
in,  and  said :  "No '  It  ihe  u'aarge  is  to  be  fixed,  it  must  be 
fixed  now.  We  will  not  submit  to  the  arbitiation  of  the 
Board  of  Trade."  Sometimes  the  railways  gained  their 
point,  and  sometimes  the  traders ;  and  thus  on  certain 
charges  there  is  an  appeal  to  the  Board  of  Trade,  and  on 
certain  others  there  is  not.  The  traders,  indeed,  as  sub- 
sequent proceedings  ha  e  shown,  have  had  their  bugbear, 
"vagueness,"  barlshed  a^  a  price. 

Tlie  publication  of  rates  is  a  debated  point  upon  which 
no  definite  provision  is  made  in  the  bill,  or,  at  all  events, 
no  provision  other  than  that  of  previous  Acts,  which  in 
this  respect  have  not  invariably  been  observed.  The  mo- 
tion that  the  railway  companies  should  exhibit  at  their 
stations  all  the  actual  rates  chargeable  from  those  sta- 
tions was  not  accepted  by  the  committee.  Mr.  Acworth 
has  scouted  this  idea  on  the  ground  that  such  exhibition 
would  require  a  forest  of  timber ;  but  he  has  himself  made 
the  valuable  suggestion  that  changes  in  the  rates  should 
be  published  in  the  monthly  journal  issued  by  the  Board 
of  Trade,*  as  the  rates  on  the  French  railways  are  pub- 
lished in  the  Moniteur.  The  trader  may,  however,  under 
the  Act  of   188£,  demand  an  exhaustive  analysis  of  his 

*  Nineteenth  Century,  vol.  xxxi.  p.  140. 


THE  ENGLISH  liMLWAY  RATE  QUESTION        299 

rate,*  so  that  he  may,  if  he  pleases,  perform  for  himself 
any  one  of  the  services  charged  for.f 

B.  When  the  railway  companies  promoted  their  bills, 
in  1884-85,  to  place  the  legality  of  terminal  charges 
beyond  question,  the  traders  vehemently  opposed  them, 
because  the  proposals  were  unaccompanied  by  any  modifi- 
cation of  rates.  When  the  Board  of  Trade  proposed  to 
deal  with  rates  and  terminals  together,  the  railways  were 
up  in  arms. J  When,  however,  the  traders  and  the  railway 
companies  came  face  to  face  with  the  Board  of  Trade,  in 
1889,  they  were  both  obliged  to  give  WiVj.  The  traders 
had  to  submit  to  terminals,  and  tiie  railway  companies 
had  to  submit  to  the  "confiscatory  policy"  of  revision  of 
maximum  rates.  The  delinite  provision  of  a  charge  for 
terminals  followed,  indeed,  logicallj'  upon  the  demand  for 
specified  ingredients  of  charge.  Under  the  former  Acts 
"  the  rate  for  '  conveyance '  was  the  only  sum  which  was 
set  out  in  definite  figures.  Tlie  sums  which  might  be 
charged  for  station  and  service  terminals  were  left 
vague."  §  Terminals  were,  however,  charged,  ||  although 
there  were  no  statutory  powers  to  charge  specific  sums 
for  them ;  and  the  railway  companies  were  ever  doubtful 
until  the  decision  in  Hall's  case  ^  settled  the  question. 

In  j)ursuance  of  the  policy  of  exhaustive  specification 

•Sect.  33,  subsections  3  and  7. 

t  Since  the  Act,  with  its  attendant  Provisional  Order  Confirmation  Acts  of 
1H91  and  lKi(2,  came  into  force,  some  of  the  railway  companies  have,  it  would 
appear,  refused  to  render  the  details  of  rates  to  traders.  In  order  to  affirm  the 
state  of  the  law  on  the  point,  the  Board  of  Trade  took  in  June,  1803,  the 
opinion  of  counsel.     This  opinion  was  as  follows :  — 

"  Upon  a  proper  application  beint;  made  under  subsection  3  of  Section  33 
of  the  act  of  188M,  the  company  are  bound  to  dissect  the  actual  charge  made, 
on  the  ground  that  the  subsection  applies  not  only  to  the  maximum  rates,  but 
also  to  the  charge  made  or  claimed."  Hansard,  Series  IV.,  vol.  12,  col. 
1045. 

t  See  above  ;  and  cf.  Grierson,  Railway  Rates,  p.  80. 
^Provisional  Order  Bills  Report,  1891,  Part  II.,  p.  1075. 
II  Ibid.,  p.  1112.  11  Quoted  above. 


h/ 


800 


QUAIiTKIiLY  JOURNAL  OF  ECONOMWH 


\*  ■ 


of  charge,  the  Board  of  Triide  for  the  first  time  recognizud 
a  distinction,  which  has  now  hocoino  a  .statutory  distino- 
tion,  between  station  terminals  and  service  terminals.* 
The  meaning  of  this  distinction  is  obvious.  Station 
terminals  are  charges  for  the  use  of  station  buildings  or 
sidings,  while  service  terminals  are  charges  for  certain 
manual  operations. 

The  pros  and  cons  of  the  complicated  question  of 
station  terminals  cannot  be  fully  given  here,  but  the  chief 
points  may  be  suggested.  In  the  first  place,  since  some 
traders  use  tin  station  and  some  do  not,  it  is  clear  that, 
unless  there  were  a  definite  reduction  to  the  trader  who 
did  not  use  the  station,  he  would  be  paying  for  a  service 
which  he  did  not  demand.  jNIoreover,  unless  there  were 
specific  rates  minus  the  terminal,  no  trader  could  tell 
whether  or  not  the  rate  jjaid  by  his  neighbor,  wIkj  loaded 
his  goods  at  his  own  siding,  fell  within  the  law  of  undue 
preference.  Again,  if  the  terminal  were  included  in  the 
mileage  rate,  the  long-distance  traflic  might  be  liamli- 
capped  in  relation  to  the  short-distance  traffic,  though 
not  necessarily.  On  the  other  hand,  if  the  same  terminal 
were  charged  irrespective  of  distance,  as  was  the  case  in 
the  Board  of  Trade  schedule  and  is  now  in  the  Acts  em- 
bodying the  Provisional  Orders,  the  short-distance  trafiio 
would  be  handicapped  in  relation  to  the  long-distance 
traflic.  It  happens  that  the  kind  of  traffic  which  is  most 
affected  is  the  export  traflic ;  and  it  was  therefore  argued 
that  the  proposed  terminal  would  act  as  a  restraint  upon 
exports.  Again,  it  was  shown  that  terminal  facilities 
varied  very  much,  and  that  a  uniform  charge  for  these 
would  be  unfair.  The  strongest  argument,  however, 
against  terminals  was  the  argument  that  the  schedule  of 
the  Board  of  Trade  jirescribed  differential  distance  rates 
for  conveyance,  and  that  these  secured  for  the  company 
due  payment  in  respect  of  the  circumstance  that  short- 

*  Provisional  Order  Bills  Report,  1801,  Part  II.,  p.  6T. 


TUE  ENGLISH  RAILWAY  BATE  QUESTION        801 


(listanco  tiidlic  was  relatively  more  expensive  to  deal  with 
than  long-distanue  trallic. 

(a)  The  meaning  of  station  terminal  is  expressed  in 
the  following  dofmition:  "The  maximum  station  terminal 
is  the  maximum  charge  which  the  C()m[)any  may  make  to 
a  trader  for  the  use  of  the  accommodation  provided,  and 
for  the  duties  undertaken  by  tlie  Company  for  whic'  no 
other  provision  is  made  in  tliis  schedule,  at  the  terminal 
station  for  or  in  dealing  with  merchandise,  as  carriers 
thereof  before  or  after  conveyance."*  This  definition 
must  be  taken  in  connection  with  the  specification  of  ser- 
vices under  service  terminals.  It  is  held  to  exclude 
specific  charges  for  such  services  or  duties  as  signalling, 
marshalling  trucks,  etc.,  which  are  held  to  be  part  of  the 
necessary  functions  of  the  railway,!  not  susceptible  of 
being  made  the  subjects  of  Independent  charge. 

(6)  Service  terminals  are  defined  as  consisting  of  (1°) 
lofiding,  (2°)  unloading,  (3°)  covering,  and  (4°)  uncover- 
ing. Each  of  these  is  subject  of  separate  charge,  when 
separation  of  charge  is  re(iuired ;  and  no  one  of  them 
may  be  charged  unless  the  service  is  rendered. | 

Prior  to  1845  very  few  of  the  railway  companies  did 
the  business  of  carriers,§  and  thus  the  question  of  termi- 
nal charges  did  not  arise  until  after  the  railway  system 
had  developed  to  some  extent.  Terminal  charges  without 
specification  came  afterwards.  It  was  only  in  the  schedule 
of  1891,  constructed  by  the  Board  of  Trade,  that,  in  obe- 

*An(il[isis  of  the  lijitway  Bates  and  Charges  Order  Confirmation  Acts, 
1891  and  1MI2.     Pfivl    Paper  C— (It*:!'.',  p.  102. 

t  For  which  prol)ably  they  may  be  hehl  to  receive  remuneration  as  "con- 
veyers," although  this  special  point  has  not  been  fully  tested. 

}  In  Cliiss  C,  for  exanii)le,  the  following;  are  the  chiirsjes  :  maximum  station 
terminals,  Is.  per  ton  at  each  end  ;  maximum  service  terminals, —  (a)  loading, 
3rf.  per  ton  ;  (6)  unloading,  IW.  per  ton  ;  (c)  covering,  1(/.  per  ton  ;  (d)  uncover- 
ing, Id.  per  ton.    Provisional  Order  Bills  Beport,  ISiU,  Part  I.,  p.  154. 

§  Cf.  Mr.  Littler,  Q.C.,  in  Hall  v.  London,  Brighton  id'  South  Coast  Bail- 
way,  L.  B.,  Q.  B.  D.,  vol.  XV.  p.  ->'J.H. 


1 


802 


(fUARTRhLV  JOURNAL  OF  ECONOMICS 


dience  to  tlie  priiicipk'  of  exhaustivo  disscotioii  of  charge, 
tlio  KCpaiatioii  between  station  and  service  terminals  was 
made  for  the  first  time.  *  It  is  true  that  the  four  services 
detailed,  with  the  serviie;.  of  collection  and  delivery  which 
are  now  by  implication  excluded  from  terminal  services 
in  the  legal  sense, f  were  mentioned  in  the  Act  of  1873,J 
and  traders  were  entitled  to  demand  revision  of  them; 
but  there  was  no  jirovision  lor  specilication  of  charge  such 
that  the  trader  could  determine  whether  or  not  he  could 
perform  any  one  of  the  services  for  himself  more  elliciently 
or  more  eeonomieally  than  the  railway  company  was  [ire- 
jiared  to  do  it  for  him.  Here,  however,  an  im[)ortant 
legal  i)oint  arose.  Had  the  trader  a  right  to  demand 
access  to  the  premises  (jf  the  lailway  company  for  any 
purpose  whatever?  Under  the  Act  of  1H5-1  the  trader 
is  entitled  to  "reasonable  facilities"  ;§  but  it  is  open  to 
doubt  how  far  this  provision  will  entitle  him  to  insist 
upon  performing  services  customarily  performed  by  the 
railway  companies.  The  Lancashire  and  Cheshire  Con- 
ference proposed  to  the  committee  to  make  the  powers 
definite,  reserving  powers  to  the  railway  companies  to 
make  by-laws;  but  this  suggestion  was  not  adopted. || 
While  arbitration  by  the  Hoard  of  Trade  is  applicable 
to  station  terminals,  it  is  not  applicable  to  service  ter- 
minals. The  attitude  of  both  traders  and  of  railway  com- 
panies towards  arbitration  is  curiously  varied.  When  it 
is  thought  that  arbitration  will  bo  an  advantageous  jiro- 
vision for  either  party,  it  is  argued  by  the  other  that  it 

*  Provisioned  Order  Bills  Ueport,  IHOl,  Part  I.,  p.  ()7. 

t  Collection  and  delivei-y  aiul  also  woifjfliiiig  may  be  charged  a  reasonable 
sum,  to  be  deteriiiiiiud  in  case  of  dispute  by  an  arbitrator  appointed  by  the 
Board  of  Trade  at  tlio  in.<tance  of  eitlier  party.  Order  Cotifirinalion  Acts, 
London  &  North-Western  Railway,  IHOl  ;  e.;/,,  clause  .">. 

}  Sect.  15. 

§  Compare  Mr,  Pope's  statement,  Provisional  Order  Hills  Ueport,  1891, 
Part  I,,  p,  14C,  with  Mr,  Balfour  Browne's  at  p.  155. 

II  Ibid.,  p,  143. 


TUB  ENOLIsn  IIAILW'AV  UATK  QUESTION        n08 

would  he  very  absurd  to  (ix  iiiii.!utal)ly  si  cliiirge  which 
mi;,'ht,  under  certain  cnuditinns,  come  to  bo  quite  unreu- 
Houiil)h' ;  or  it  is  iirfjued  that  arbitration  es(al)lishe8  no 
principle,  and  that  it  costs  nearly  as  much  as  legal  proc- 
ess. The  railway  couqianies  accepted  the  principle  of 
iirbitration  so  far  us  station  terminals  were  concerned,  but 
objected  to  it  for  service  terminals.  They  demanded  and 
obtained  power  of  •'absolute  cliarj,'e  "  not  cliangeable  by 
arbitratittn.* 

C.  Although  there  is  no  legal  ilefinition  of  "convey- 
ance," f  the  charges  for  conveyance  are  held  in  the  Kng- 
lish  railway  system  to  be  composed  of  the  following  in- 
gredients: J  (rt)  loll  for  the  use  of  the  road ;  §  (/*) 
liaulage  rales,  ()r  the  payment  for  the  use  of  the  loco- 
motive for  haulage ;  and  ('•)  payment  for  the  use  of 
wagons.  The  splitting  up  of  rates  into  their  constituents 
was  much  insisted  upon  [)y  the  traders.  It  was  regarded 
as  a  great  advantagi;  to  them.||  This  realTiirmed  statutory 
power  in  the  hands  of  the  trader  to  demand  analysis  of 
his  rate  has  been  one  of  the  immediate  causes  of  the 
recent  friction  between  the  railways  and  the  traders.^ 

(«)  First,  in  regard  to  tolh.     Although  the  apparent 

*Cf.  Prorisionnl  Order  Hills  Report,  IHO],  Pai-t  I.,  p.  xv,  and  Part  .>.,  p. 
1114. 

tSee,  liowever,  Wills,  .1.,  ,iii(lt;)iii'iit  in  //'///  v.  Loniton,  Hrhjiiton  iV  .S'oh(A 
Coast  Jiailwny,  L.  I{.,  Q.  li.  1).,  vol.  xv.  j).  ."lO.").  See  also  Provisiomil  Order 
mils  liejiorl,  W.n,  Piirt  I.,  pp.  .'U,  ;i7,  HI,  ami  117.  "  Cunvoyanco "  and 
"carriaijo"  are  not  Hj-noiiynious.  The  niileape  rate  provides  for  that  part 
of  the  duty  which  \a  conveyance,  and  the  Hhttion  terminal  (and  the  service 
terminal)  for  another  part  of  the  dnty  which  is  perfonned  by  the  railway 
companies  an  "carriei'S."     C/.  Mr.  Bidder,  (J.C,  Ibid.,  p.  7."i. 

t  Jleport,  WU,  pp.  .'"ill  and  47!K  See  also  Griorson,  Railway  Rates,  English 
and  Foreign,  lS,Mi,  pp.  !l(i,  11". 

§  Si(,'nallin);  is  prolinhly  included  in  this,  although  the  point  has  not  been 
legally  tested.  On  the  tradem'  fear  that  Ki);nallinj»  nii(jht  l)o  made  the  subject 
of  a  separate  charge,  see  Provisional  Order  Bills  Report,  IH'.H,  Part  I.,  p.  H2, 

II  Provisional  Order  Hills  Report,  IKOl,  Part  I.,  p.  Sfi. 

li  Although  the  power  is  not  novel. 


i' 


>) 


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QUARTERLY  JOURNAL   OF  ECONOMICS 


intention  of  Parliament  was  to  deal  with  the  whole  sub- 
ject of  railway  rate«  in  the  Act  of  1888,  it  was  accepted  as 
certain  by  the  Board  of  Trade  that,  under  tlie  terms  of 
the  Act,  wliile  it  was  empowered  to  deal  with  rates  and 
charges,  it  was  not  empowered  to  deal  with  tolls.*  This 
defect  in  the  drafting  of  the  Act,  if  it  was  a  defect  in 
drafting,  produced  the  curious  result  that,  if  the  I'ailway 
companies  were  dissatisfied  with  the  revised  classification 
and  schedule, —  that  is,  if  the  reduction  of  rates  were 
carried  too  far, —  it  was  open  to  them  to  refuse  to  at-t  as 
conveyors  or  carriers,  and  simply  to  fall  back  upon  their 
function  as  road-owners  and  upon  their  statutory  powers 
to  levy  certain  tolls  for  the  exercise  of  that  function.!  If 
the  maximum  rates  and  charges  permitted  to  them  by 
Parliament  for  the  total  of  their  services  fell  short  of  their 
powers  of  charge  for  one  of  these  services,  it  might  be- 
come their  interest  to  follow  this  course.  Such  a  policy 
would  result  in  the  development  of  haulage  companies 
and  of  wagon  companies,  express  companies,  etc.,  sucli 
as  are  common  in  America,  in  order  to  undertake  func- 
tions presently  performed  by  the  railway  companies. J 
The  railway  companies  maintained,  and  the  contention 
was  not  rebutted  by  the  opposing  counsel,  tliat  the  old 
Acts  of  Parliament  were  not  repealed  by  the  Act  of  1^88 
and   tlie  subsequent  Provisional  Orders,  excepting  in  so 

'Provisional  Order  lillts  Rejiorl,  lS!tl,  Part  I.,  p.  110  ;  also  Mr.  Couiteiiay 
Boyle's  statement,  p.  47il. 

t  Provlslomd  Order  Hills  Report,  IS'.tl,  Part  I.,  p.  IIH  ;  also  Grierson,  Hall- 
way Rates,  Emjllsh  and  Forelyn,  1(-K(i,  j).  !IT. 

t  The  private  use  of  railway  lines  on  payment  of  tolls  is  not  nnknown.  .See 
Powcll-Dutfryn  case,  ([noted  Provisional  Order  Bills  Report.  IMH,  Part  I.,  p. 
I'JO.  The  Court  of  Chanuery  decided  in  this  case  tliat  the  only  diflicnity  in  tlie 
way  of  private  jjersons  running  trains  over  a  railway  line  is  tliat  siicli  persons 
cannot  compel  the  railway  company  to  work  the  signals, —  not  because  they 
cannot  reciuire  tliis  to  be  done,  hut  because  in  the  nature  of  the  case  they  are 
not  in  a  position  lO  see  tliat  tlieir  ordera  are  carried  out.  .Some  tradew  sl'Ciu 
not  indisposed  to  attempt  to  frighten  the  railway  companies  by  suggesting 
that  private  comiiaiiies  might  establish  stations  and  charge  lower  terminala 
than  the  railways.    Cf.  Ihld.,  p.  'Jt!4. 


TUE  ENGLISU  RAILWAY  RATE  QUESTION        305 


far  as  they  fixed  rates  and  chan/es,  the  tolls  being  left 
untouched.*  Saving,  however,  this  "last  trench"  of  the 
railway  companies,  the  old  tolls  were  practically  abolished ; 
and  conveyance  rates,  including  them  as  one  of  three  in- 
gredients, were  substituted. 

(/))  In  considering  the  second  ingredient,  haulage  rates, 
it  is  to  be  observed  that  the  principle  adopted  in  the 
earlier  English  railway  Acts  for  the  fixation  of  maximum 
tolls  was  the  principle  of  "  equal  mileage."  This  arrange- 
ment was  drawn  from  the  canal  regulations,  and  also  from 
the  fixed  tolls  of  the  horse  railways  which  preceded  the 
loctmiotive  lines ;  but  the  development  of  traffic  produced 
differential  rates,  and  was  accelerated  by  tliem.  There 
are  two  leading  points  in  the  discussion  of  haulage  rates 
in  the  English  system.  These  are :  (1)  the  graduation 
of  rates  for  distance,  with  or  without  a  minimum  of 
chargeable  distance ;  (2)  the  graduation  of  rates  for  ton- 
nage, with  or  without  a  minimum  of  weight,  varying  with 
the  classification.  On  both  of  these  points  there  is  a  cross- 
current of  interests.  The  interest  of  all  large  traders  is 
to  reduce  the  powers  of  charge  for  quantities ;  and  that 
of  some  large  traders,  those  dealing  in  goods  which  are 
customarily  transported  to  a  distance,  is  to  reduce  long- 
distance rates.  On  the  other  hand,  it  is  the  interest  of 
small  traders!  to  prevent  the  large  trader  from  having 
the  advantage  over  him  which  would  be  secured  by  a 
differential  rate  in  respect  of  quantity ;  and  it  would  be 
the   interest   of  traders,  large  or   small,  whose   traffic   is 

*Mi'.  liiddcr,  Q.C.     rrovislonal  Order  Hills  Report,  IMH,  Part  I.,  j..  478. 

T  Or  iippeai's  to  be  ;  for,  if  the  railway  comiiaiiy  makes  a  laiRO  net  profit 
on  a  lai'^e  wliolesale  traffic  at  a  low  rate,  it  will  be  able  to  cbarfje  lower  rates 
for  small  quantities  than  would  be  possible  if  its  net  profit  were  redueed,  owing 
to  the  restriction  of  tlie  wholesale  traffic  to  tlie  ".nds  which  could  afford  to 
pay  a  hi);Ii  rate.  The  effect  of  a  differential  i.inll'  in  respect  of  (juantity 
would,  however,  be  to  restrict  the  small  trader  to  a  purely  local  market.  He 
coidd  not  compete  against  the  larfje  trader  in  a  distant  market,  since  the 
difference  in  rates  of  carriage  in  respect  of  quantity  might  suffice  to  ijive  the 
large  trader  a  profit. 


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mainly  local,  to  oppose  a  differential  distance  tariff.  The 
railway  companies'  interest  lies  in  obtaining  both  the 
highest  niaximnm  powers  and  permission  to  give  differen- 
tial rates  in  so  far  as  these  might  be  necessary  to  secure 
paying  traffic.  The  railway  companies'  interests  thus 
coincide  at  a  certain  point  with  those  of  both  small  and 
large  traders. 

(1)  Differential  Rateft  in  Respect  of  Distance. —  Such 
rates  may  be  calculated  by  two  methods :  (a)  by  simple 
gradation, —  so  much  for  10  miles,  20  miles,  50  miles,  and 
soon;  or  (i)  by  the  cumulative  method, —  so  much  per 
mile  for  the  first  10  miles,  so  much  less  for  the  next  20 
miles,  so  much  less  for  the  next  50  miles,  and  so  on. 
The  first  method  is  open  to  the  objection  that  the  charge 
for,  say,  19  miles  will  be  positively  greater  than  the  charge 
for  21  miles,  unless  the  reduction  at  each  stage  is  infinites- 
imally  small.  This  objection  was  surmounted  by  the 
"overlapping  clause,"  which  prescribed  that  the  rate  for 
one  distance  was  not  in  any  case  to  be  less  than  the  rate 
for  a  shorter  distar.ce.  This  method,  with  the  overlap- 
ping clause  as  a  rider,  was  the  metliod  of  the  English 
system  prior  to  1892.  Now,  however,  under  tJie  new 
regulations,  the  second,  or  cumulative,  method  has  been 
adopted,  which  is  free  from  the  objection  of  overlapping, 
although  for  long  distances  it  involves  some  calculation. 
Given  the  expediency  of  differentiation  of  rate  in  terms  of 
distance,  there  seems  little  to  object  to  it  on  grounds  of 
principle. 

The  question  of  minimum  chargeable  distance  is  neces- 
sarily associated  with  the  question  of  terminals.  Ter- 
minals are  not  chargeable  on  Class  A  (heavy  goods)  ;  and 
on  such  goods  it  appeared  to  the  Board  of  Trade  fair  to 
give  a  relatively  high  minimum  of  distance,  for  the  reason 
that  the  cost  to  the  railway  for  a  short  haul  was  greater 
than  the  amount  yielded  by  the  conveyance  rate  on  a 
mileage  basis  pure  and  simple.*     In   this   concession    to 

*  Pruvisiuhiil  Order  Hills  Report,  1)><>1,  I'art  I.,  p.  'JiK). 


THE  ENGLISH  RAILWAY  RATE  QUESTION        307 

the  "  cost  of  service "  principle  the  Board  of  Trade  fol- 
lowed precedents  as  well  in  connection  with  the  same 
matter  as  in  connection  with  additional  mileage  allowances 
for  tunnels,  etc., —  as,  e.g.,  the  Severn  Tunnel, —  and  for 
bridges, —  as,  e.f/.,  the  Forth  Bridge. 

The  older  Acts  gave  a  minimum  chargeable  distance 
of  6  miles  for  heavy  goods  conveyed  at  low  rates ;  but 
the  more  recent  Acts  had  slightly  increased  the  maximum 
conveyance  rate,  and  had  given  a  minimum  chargeable  dis- 
tance of  3  miles.*  The  new  regulations  give  a  minimum 
chargeable  distance  where  no  terminal  is  charged  of  6 
miles,  where  one  terminal  is  charged  4^^  miles,  and  where 
two  terminals  are  charged  3  miles.f  There  is  a  proviso  to 
the  effect  that,  where  goods  pass  from  one  line  to  another 
in  the  course  of  a  journey  within  the  minimum  applicable 
to  the  class,  they  are  not  liable  to  a  double  short-distance 
charge.^ 

The  larger  proportion  of  the  traffic  on  the  English 
lines  is  short-distance  traffic.§  The  average  journey  in 
the  South  Wales  coal  region  is  20  miles.  ||  In  the  Stour 
Valley  district  35  per  cent,  of  the  traffic  is  transported 
for  distances  under  6  miles.l^  A  vivid  illustration  of  the 
mode  in  which  short-distance  traffic  is  conducted  in  Eng- 
land is  given  by  Sir  Henry  Oakley,  manager  of  the  Great 
Northern  Railway.  "  Here  is  a  particular  train  upon  a  par- 
ticular morning.  It  starts  with  6  wagons.  At  the  first 
station  it  stops  at  it  puts  off  1  and  takes  on  4,  at  the 
next  it  puts  off  3  and  takes  on  3,  at  the  next  it  puts  off 
1  and  takes  on  nothing,  and  at  the  next  it  puts  off  6  and 
takes  on  3,  and  it  goes  on  over  a  journey  of  76  miles.  By 
working  traffic  between  stations  on  that  76  miles,  and  col- 
lecting through  traffic,  it  lands  with  25  wagons  at  the 

'Provisional  Order  Bills  Report,  1891,  Part  I.,  pp.  287,  296. 
t  Ibid,  p.  3i:}.  i  Ibid.,  pp.  321,  322. 

^Report,  Part  II.,  p.  112C,  Query  1032"). 
II  Report,  Part  I.,  p.  249,  Query  1107.  11  Ibid.,  p.  293. 


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QUARTERLY  JOURNAL  OF  ECONOMICS 


end,  the  greatest  weight  it  has  ever  had  on  the  whole 
journey."  *  Tlie  railway  conipanies  profess  that  the  short- 
distanco  traffic  does  not  pay.f  The  bulk  of  the  short-dis- 
tance traffic  consists  of  minerals, —  coal  and  iron  ore,  fur 
example,  from  the  pit-montli  to  the  iron  works,  or,  in  the 
case  of  the  former,  for  shipTnent  coastwise  or  for  export.^ 
The  remainder  of  the  short-distance  traffic  is  of  the  sort 
described  above.  §  Some  of  this  tralhc,  especially  on 
branch  lines,  is  probably  often  conducted  in  an  unnecessa- 
rily expensive  manner.  || 

According  as  we  regard  it  from  the  point  of  view  of  the 
"  cost  of  service  "  or  from  the  point  of  view  of  "  what  the 
traffic  will  bear,"  the  reduced  rate  per  mile  for  the  long 
haul  rests  either  upon  the  principle  that  it  costs  less  per 
mile  to  move  a  ton  100  miles  than  it  costs  to  move  it  10 
miles,  or  upon  the  principle  that  the  distance  to  which 
traffic  can  be  procured  for  carriage  is  in  reciprocal  propor- 
tion to  the  rate  per  mile.^ 

(2)  Differential  Rates  in  respect  of  Quantity. —  In  the 

*  Provisional  Order  Hills  Report,  l.SiU,  Part  I.,  p.  iSOil.  The  average  speed 
of  these  local  trains  is  ti  miles  an  hour.     Ihid.,  p.  'MM\,  Qiiery  14(11. 

t  "  It  has  forced  itself  upon  our  minds  constantly  that,  jiractically,  the 
long-<listance  traffic  pays  for  the  extra  expenses  incurred  in  working  the  short- 
distance  traffic.  We  must  get  a  dividend  j  and,  if  we  cannot  get  it  out  of  the 
short  distances,  we  must  get  it  out  of  the  long  dis'?iices."  Manager  of  Great 
Northern  Railway  in  evidence,  Provision jl  Order  Hills  Report,  IhiU,  Part  I., 
p.  309,  Query  loU'i). 

t  The  extent  to  which  the  mineral  traffic  pays  or  does  not  i)ay  is  a  disputed 
point.  Cf.  the  rival  views  of  Mr.  Conder,  Proreeilinys  Institution  of  Mechanical 
Engineers  (England),  IK'S,  p.  1S4,  and  of  Mr.  Price  Williams,  Ibid.,  1879,  p. 
96.  Cf.  also  observations  on  the  relative  profit  of  passenger  and  goods  traffic. 
State   ent  lintish  Iron  Trade  A.ssociation  flx'.K)],  p.  l(i. 

§  Shunting  heavy  triiffic  is  said  to  cost  on  the  Loudon  &  North- Western 
Railway  Company  ll.(>  per  cent,  of  the  entire  cost  of  locomotive  power  used  on 
the  line.     Proceedings  Institution  oj  lilichonicul  Engineers,  1H7.S,  p.  IS?. 

II  See  the  remarks  of  Mr.  IJcrgeron,  Iliid.,  1S70,  p.  147;  and  cf.  Herbert 
Spencer's  criticism,  "  Railway  Morals  and  Railway  Policy,"  Essays,  p.  301. 

^From  the  point  of  view  of  railway  administration  both  principles  must  be 
taken  into  account.  Cf.  Atti  della  Commissione  d'  Inrhiesta  sidl'  Exercizio  delle 
Ferrovie  Italiane,  1K84,  Parte  II.,  vol.  ii.  ji.  957  et  seq. 


THE  ENGLISH  ItAILWAY  RATE  QUESTION        309 


■ 


earlier  Acts  there  was  no  minimum  of  quantity.  There 
were  equal  tonnage  rates  within  the  class ;  and  the  class 
was  fixed  with  exclusive  regard  to  the  nature  of  the  goods, 
irrespective  of  quantity.*  Under  the  railwaj-  clearing- 
house classification  the  mininium  of  weight  was  fixed 
at  4  tons  for  goods  heavy  in  relation  to  their  value  i^er 
unit  of  weight,  and  at  2  tons  for  light  goods.f  '•  Iiis 
limitation  grew  up  in  practice  within  the  maximum  total 
rates. I  Tliere  are  two  elements  in  the  fixation  of  the  min- 
imum quantity :  (1)  the  minimum  quantity  consignable 
at  a  certain  rate,  and  (2)  the  minimum  load  at  a  certain 
rate.  That  these  elements  are  distinct  §  will  be  obvious 
when  one  considers  that  the  same  trader  —  a  chemical 
manufacturer,  for  example  —  might  send  in  one  consign- 
ment separate  packages  of  different  goods  which  could  not 
be  loaded  in  the  same  truck  without  danger.  Such  goods 
are  subjected  to  a  provision  for  a  minimum  load  inde- 
pendently of  the  provision  for  a  minimum  consignment.  || 
The  increasing  size  of  the  trucks  in  use  on  the  railway 
system  rendered  such  provisions  necessary  from  the  rail- 
way point  of  view;^  and  the  large  traders  demanded 
concessions  in  rates  in  consideration  of  large  consign- 
ments. These  large  traders,  whose  business  required  rela- 
tively small  consignments,  together  with  the  small  traders, 
objected  to  a  high  minimum  of  weight  at  a  certain  rate, 
because  they  were  unable  to  take  advantage  of  the  reduc- 
tion by  consigning  in  large  quantities.  It  happened  that 
the  agricultural  interest  was  involved  in  this  question,  not 

*  "  In  no  important  act  is  there  any  limit  of  consignment  for  tonnage  rate." 
Mr.  Coiirtenay  Boyle,  Provisiomil  Order  Bills  Report,  IfSlH,  Part  I.,  p.  503. 

t  Provisional  Order  Hills  Report,  l.S'.tl,  Part  I.,  p.  407  et  seq. 

t  Ibid.,  p.  so;!.  §  Ibid.,  p.  rm. 

II  These  are  in  Class  10.    Ibid.,  pp.  504  and  510. 

IT  In  lK(i0  the  largest  truck  had  a  en  )aeity  of  C  tons,  in  ISOl  of  10  tons. 
Provisional  Order  Bills  Report,  IHUl,  Part  I.,  p.  510,  Quii  ics  ;J475  and  iUTG. 
See  also  Proceedings  of  Institution  of  Mechanical  Engineers,  1.SS4,  p.  416.  "  The 
average  daily  load  of  goods  trucks  does  uit  exceed  one-half."    Ibid.,  p.  431. 


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80  muc)i  because  agricultural  produce  was  usually  sent  in 
lots  of  less  than  4  tons, —  for,  as  it  happened,  the  con- 
signments usually  exceeded  that  quantity,*  —  but  because 
artificial  manures  were  customarily  sent  in  lots  of  2  tons 
and  under  4  tons.f  There  were  also  many  products 
of  iron  manufacture  which  came  in  the  same  category 
as  chemical  manures  in  this  respect.  These  interests  pre- 
vailed at  the  Board  of  Trade  inquiry,  and  the  minimum 
consignment  in  the  heavy  class  at  a  low  rate  was  fixed 
at  2  tons.J  But  this  did  not  satisfy  the  railway  com- 
panies nor  the  large  traders,§  and  they  succeeded  in  in- 
ducing the  committee  to  raise  the  minimum  from  2  to 
4  tons.  II  Perhaps  the  chief  consideration  which  weighed 
with  the  committee  was  that  the  railway  companies  had 
reduced  actual  rates  for  long-distance  traffic  on  the  basis 
of  a  4-ton  limit,  and  that  reduction  to  a  2-ton  limit 
might  weaken  the  argument  for  maximum  rates  approxi- 
mating to  the  existing  actual  rates.  The  differential 
rate  as  finally  adjusted  follows  the  classification.  Heavy 
goods  are  charged  according  to  the  rate  in  Class  A,  if 
they  are  in  4-ton  lots ;  according  to  Class  B,  if  in  lots  of 
less  than  4  tons ;  and  in  Class  C,  if  in  lots  of  less  than  2 
tons.^  Apart  from  the  inferior  limit  of  consignment, 
there  is  the  question  of  graduated  rates  for  quantities. 
The  Board  of  Trade  proposed  to  divide  heavy  traffic  into 
three  divisions  as  regards  weight  of  consignment:  (1) 
consignments  under  10  tons ;    (2)  those  between  10  and 


^Provisional  Order  Hills  Report,  IKOl,  Part  I.,  p.  510,  Query  3470. 
t  76iW.,  p.  504.  t /i((/.,  p.  4X7  f<  sf7.  §  JifW.,  p.  48S. 

II  IliiiL,  p.  xxxi.  'ilbid.,  pp.  .")30  and  .")40 ;  .also  p.  xxxii. 


Note. —  In  England  the  goods  ton  is  2,240  pounds,  .and  the  mineral  ton  is 
2,.352  pounds.  In  America  the  ton  is  2,(KH)  pounds.  The  ratio  of  ^American  to 
English  weights  is  thus  1  to  1.12  and  1  to  1.170  for  goods  and  minerals  re- 
spectively. These  important  differences  are  generally  overlooked  in  attempts 
to  compare  rates. 


THE  ENGLISH  RAILWAY  RATE  QUESTION        311 

250  tona;  (3)  those  above  250  tons.*  These  figures 
were  employed  to  define  precisely  the  indefinite  expres- 
sions "truck-load"  and  "train-load."  But  the  traders 
in  4-ton  consignments  now  united  with  the  traders  in 
smaller  consignments  to  defeat  the  10  to  250  ton  pro- 
posal, which  was  clearly  made  in  the  interests  of  the  large 
traders.!  Since,  again,  high  maximum  powers  were  what 
the  railways  wanted,:):  and  since  the  railways  and  some 
of  the  traders  united  their  forces,  the  stronger  battalions 
were  against  the  proposal ;  and  so  the  committee  were 
constrained  to  throw  it  out.  The  differentiation  of  rate 
thus  existing  is  that  indica.ed  above  in  connection  with 
minimum  consignments.  Having  offended  the  small 
traders  b}'  fixing  tlie  minimum  consignment  at  4  tons, 
the  committee  propitiated  them  by  rejecting  the  train- 
load  proposal  of  the  Board  of  Trade. § 

(cO  The  third  ingredient  of  the  conveyance  rate  is  the 
payment  for  the  use  of  the  wagon.  The  clause  dealing 
with  this  point,  as  finally  adjusted,  states  that  in  cases 
where  the  railway  company  do  not  provide  trucks  "the 
charge  authorized  for  conveyance  shall  be  reduced  by  a 
reasonable  sum,  which  shall,  in  case  of  difference  between 
the  company  and  the  person  liable  to  pay  the  charge,  be 
determined  by  an  arbitrator  to  be  appointed  by  the  Board 


'Provisional  Order  Bills  Report,  ISOl,  Part  II.,  p.  1075.  As  regards  the 
10  and  2,")()  ton  gradation,  the  reduction  of  rate  applies  only  to  Classes  A  and  B  ; 
as  regards  the  10-ton  gradation  (the  second  division),  it  ap])lies  oidy  to  Classes 
Candl.     Ibid. 

t  There  were  alleged  to  be  only  (i  or  7  coal-traders  in  London  who  could 
deal  with  train-loads.  Ibid.,  p.  IIIW,  Query  10()01.  For  the  arguments  of  the 
large  traders,  see  Statement  British  Iron  Trade  Association  [ISIW],  p.  18. 

t  The  railway  companies  denied  that  there  was  any  material  difference  in 
cost  between  handling  traffic  in  truck-loads  collected  from  several  different 
tradera  and  handling  traffic  in  train-loads  forwarded  by  individual  traders. 
Some  colliery  ownei's  agreed  with  this  visw.  Provisional  Order  Bills  Report, 
1891,  Part  II.,  Query  101211  ;  .also  Query  107."0, 

§  Provisional  Order  Bills  Report,  18',)1,  p.  xlix. 


812 


QUARTERLY  JOURNAL   OF  ECONOMICS 


of  Trade."  *  The  provision  of  trucks  is  not  obligatory 
upon  the  railway  in  respect  of  Class  A  and  certain  other 
selected  goods  in  Class  H, —  lime,  for  instance.  In  the 
older  Acts  the  charge  for  wagon  hire  was  not  invariably 
specified ;  but,  where  specified,  it  was,  as  ^,  rule,  one- 
eighth  of  a  penny  (^Jg-  cent)  per  ton  per  niile.f  The 
traders  were  exceedingly  anxious  to  have  this  portion  of 
the  dissected  rate  definitely  fixed.J  Some  urged  that  it 
should  be  fixed  at  one-half  the  rate  mentioned.§  But 
the  differences  between  one  railway  and  another,  and  be- 
tween one  set  of  traders  and  another,  were  found  to  be  so 
great  that  the  charge  for  wagon  hire  was  not  fixed  at  a 
uniform  specific  rate ;  but  it  was  held  to  be  included  in 
the  conveyance  rate,  specification  to  be  made  by  the  rail- 
way companies  to  the  traders  on  the  general  principle  of 
specification  of  ingredients  of  rate. 

The  question  is  an  exceedingly  difficult  and  important 
one ;  for  in  practice  it  may  occur  that  the  rate  for  Class 
A,  which  is  exclusive  of  wagon  hire, —  the  railway  com- 
panies not  being  obliged  to  provide  wagons  for  that  class, 
—  may,  when  the  wagon  hire  is  added,  actually  exceed 
the  rate  for  Class  B,  where  the  companies  do  customarily 
provide  the  wagons.  The  rate  of  wagon  hire  must  there- 
fore be  kept  at  a  point  below  that  under  which  this  state 
of  charge  would  arise.  It  seemed  difficult  to  do  this  ar- 
bitrarily with  equal  justice  to  all  the  interests;  and  there- 
fore, as  in  other  cases  of  a  similar  order,  the  matter  was 
left  for  settlement  by  arbitration  by  the  Board  of  Trade 
in  case  of  need. 

In  connection  with   this  the  following  features  of  the 

*  Provisional  Order  Bills  Report,  IKOl,  Part  I.,  p.  55.  The  number  of 
tradew'  trucks  on  the  London  &  North- Western  Railway  system  alone  aniounta 
to  .S4,(K)0,  while  the  number  of  trucks  owned  by  the  railw.iy  company  is  oidy 
54,550.  liailwaij  and  Canal  Truffle  Act,  1H8S,  Return  in  pursuance  of  Sect.  .'i2, 
etc.,  c.  5<.«0,  isyi),  p.  10. 

t  Provisional  Order  Hills  Report,  1«91,  Part  I.,  p.  '-'(>;i.        }  Ibid.,  p.  1056. 

§  Statement  by  Mining  Association  of  Great  Britain,  <iuoted  Ibid.,  p.  263. 


THE  ENGLISH  RAILWAY  RATE  QUESTION        313 

Englisli  system  are  to  be  noted.  The  return  of  empty 
trucks  is  not  in  present  practice  made  the  subject  of  a 
separate  charge.*  The  wagons  of  private  owners  or  com- 
panies are  subject  to  very  great  detention.  A  wagon 
makes,  for  example,  on  an  average,  only  two  journeys 
a  month,  when  employed  in  traffic  between  the  north 
and  the  south  of  England.f  A  journey  of  twenty-five 
miles  usually  takes  a  wagon  a  week  to  go  and  return. J 
The  interests  of  the  railway  companies  and  of  the  wagon- 
owners  are,  up  to  a  certain  point,  identical ;  and  then 
they  become  divergent.  It  is  important  for  both  that 
a  relatively  large  charge  should  be  made  for  wagon  hire ; 
for  the  railways  charge  those  who  do  not  nave  wagons 
the  prescribed  rate,  while  the  wagon-owners  get  the  pre- 
scribed rate  by  way  of  rebate. §  On  the  other  hand,  it 
is  not  to  the  interest  of  the  railway  companies  to  have 
the  specified  rate  for  wagons  too  high,  otherwise  the 
rebate  to  the  owners  of  private  wagons  would  be  ex- 
cessive. ||  In  consequence  of  the  strength  of  the  interests 
of  owners  of  wagons, —  not  wagon  companies,  but  traders 
carrying  their  own  traffic  in  their  own  wagons, —  a  pro- 
viso was  inserted,  giving  the  owners  of  wagons  power 
to  charge  demurrage  against  the  railway  companies  for 
detention  of  trucks,^  the  raihvf;  companies  having 
similar  powers  of  charge  for  detention  of  trucks  belong- 
ing to  them. 


D.  The  railway  companies  throughout  the  country 
had,  by  common  consent,  adopted  the  classification  of  the 

*  Provisional  Order  liills  Report,  1891,  Part  I.,  p.  419  el  sefj.  Occasionally 
it  happens  that  the  railway  company  use  these  private  trucks,  admittedly  with 
or  without  permission.    See  Ibid.,  p.  4-1. 

t  Ibid.,  p.  24(!.  }  Ibid.,  p.  '-'51. 

§  Compare  Report  from  the  Joint  Committee  of  the  House  of  Lords  and  the 
House  of  Commons  on  the  Railway  Rates  and  Charges  Provisional  Order  Bills, 
1891,  Part  I.,  p.  IGO. 

II  Ibid.,  p.  2i'2.  t  Ibid.,  p.  209. 


814 


QUARTERLY  JOURNAL  OF  ECONOMICS 


V  i 


Haihviiy  Clearing  House.  This  classification  had  no  htatu-- 
tory  force.  It  simply  enihodii'd  the  customs  of  the  trade. 
It  had  not  been  made:  it  had  <,''ro\vn.  There  were  4,000 
sjiecified  articles,  and  the  recognized  plan  of  altering 
rates  was  to  move  the  article  in  which  the  change  was  to 
take  place  from  one  class  to  another.*  The  railway  clear- 
ing-house classification  was  therefore  subject  to  constant 
change.  Lord  Balfour  of  Burleigh  and  Mr.  Courtenay 
Boyle  conferred  with  the  railway  managers  and  the 
traders  for  thirteen  days  upon  classification,!  and  the 
outcome  was  the  classification  projiosed  by  the  Board  of 
Trade  in  the  Provisional  Ordur  Bills  of  18!*!.  Although 
the  proposed  classification  was  based  upon  that  of  the 
railwa}-  clearing  house,  it  was,  neccssaril}-,  entirely  differ- 
ent in  effect.  The  old  classification  was  subje;^t  to  altera- 
tion from  day  to  day,  as  the  movemeiitu  of  rates  de- 
manded.:j:  The  new  classific  ition  was  immutable,  at  all 
events,  without  the  sanction  of  Parliament.  The  first  step 
of  the  Board  of  Trade  was  to  reduce  the  number  of  the 
specified  articles  from  4,000  to  2,000.  §  The  resulting 
classification  is  really  entirely  empirical.  It  is  not  fixed 
on  any  logical  basis.  Any  serious  change  in  established 
practice  would  have  been  open  to  the  charge  of  giving 
particular  districts  or  particular  trades  undue  advantages 
over  others. 


»Cf.  The  liailwaij  and  Canal  'Irqffic  Arl,  IMHS,  by  W.  A.  Hunter,  LL.D.. 
M.P.,  London,  IHM'.t,  p.  K2. 

t  Yet  the  tradera"  counael  pleaded  before  the  Joint  Committee  that  the  clas- 
sification satisfied  neither  party.  ProvUional  Order  liiUs  Report,  1K!)1,  Part  I., 
p.  4«H. 

t  English  railway  rates  do  not  fluctuate  nearly  so  much  as  rates  in  Amer- 
ica, while  sudden  and  considerable  changes  are  almost  unknown.  The 
changes  following  upon  the  legislation  of  lXitl-il2  are  the  most  violent  that  have 
taken  place  in  England  for  many  years. 

§  The  Lanca.shiro  and  Cheshire  Conference,  which  va.')  the  exponent  in 
general  of  the  traders'  grumbles,  complained  of  this  reduction  in  number  of 
specified  articles ;  but  they  did  not  object  to  the  principles  on  which  the  classi- 
fication had  been  based.     Provisional  Order  Bills  Report,  IWU,  Part  I.,  p.  487. 


THE  ENGLISH  HAILWAT  RATE  QUESTION        815 

The  i)i'iiicipleH  of  classification  urged  by  an  iiilluential 
body  of  traders  *  were  these :  — 

1.  That  no  article  Hliould  be  rated  higher  than  it  is  at  present  (i.e., 
under  the  railwity  cieftrinn-hous*!  classification  as  it  existed  in  ISOO). 
The  trailers  have  now  got  a  classi fixation  which  should  be  amended, 
not  increased. 

2.  Classification  means  liability  to  damage  or  special  expense. 

;j.  Undaniageablo  articles  should  all  be  placed  in  the  lowest  cate- 
gory, which  should  be  varied  in  proportion  to  datnageability  and 
costliness  of  carriage. 

4.  The  nature  of  a  commodity,  its  degree  of  safenesg,  its  easiness 
of  transit,  its  bulk,  its  quantity,  and  its  trallic-producing  qualities  are 
the  considerations  that  should  regulate  its  classilication. 

This  statement  illustrates  the  attitude  of  the  traders. 
The  principles  upon  which  the  Board  of  Trade  actually 
proceeded  were  the  followiiij,' :  f — 

(rt)  Value;  (i)  damageability ;  (/■)  risk;  (tZ)  weight 
in  proportion  to  bulk ;  (c)  facility  for  tradiiig ;  (/)  mass 
of  consignments  ;  (//)  facility  fur  handli>'^. 

The  Board  of  Trade,  in  seeking  to  attain  uniformity, 
was  obliged,  on  one  hand,  to  invade  the  privileges  of  the 
rrilway  comijanies,  and,  on  the  other,  to  trespass  upon  the 
feelings  of  the  traders  by  raising  the  classification  of  cer- 
tain goods.f  In  cases  of  new  articles  arising,  the  Board  of 
Trade  is  now  empowered,  under  Section  2'4  of  the  Act  of 
1888,§  to  class  such  articles ;  but  it  has  no  power  to  alter 
the  classification  or  the  maximum  rates  fixed  by  the  Pro- 
visional Order  Confirmation  Acts  of  1891  and  1892. 

In  the  fixation  of  the  maximum  rates,  the  Board  of 
Trade  applied  a  uniform  scale  to  the  railway  companies, 

•  The  British  Iron  Trade  Association.    See  Statement  [1800J,  p.  19. 

^Provisional  Order  Bills  Report,  1891,  Part  I.,  p.  18. 

t  The  bulk  of  the  discussion  upon  classification  wa.s  in  connection  with 
manufactured  iron.  See  Mr.  Courtenay  Boyle's  statement,  Provisional  Order 
Bills  Report,  1891,  Part  I.,  p.  612  et  seq. 

§51  &  52  Vict.,  c.  25,  §  24,  subsection  11. 


Slfl 


(iUAHrKULY  JOURNAL   OF  ECONOMICS 


BO  far  iiH  HeciiuMl  priicticiihlt'.  Vet  tlu;  difftMences  are  not 
iinimi)ortaiit.  Tin;  following'  table  exhibits  the  niodo  in 
which  tliti  Hcule  has  been  applied  :  — 


MAXIMUM   nATKS. 


I. 

II. 

III. 

Abaolutety  the  lome. 

Slightly  higher  than 

SllubtlvhiKherthan 

L.  &  N.  W.  ny. 
Oreiit  Wt'HtiTii 
Great  Northurn 

Midland 
(ireat  KiiHtem 

HrlKhton 
Hoiith-Wpsti'm 
Houtb-KaHti'rn 
L.,  C.  &  Dover 

The  chief  differences  are  in  Classes  A  and  H.  In  the 
higher  l       ea  the  rates  are  practically  the  same.* 

The  following  tables  f  illnstrate  the  ditTercuces  between 
the  proposals  of  the  Hoard  of  Trade,  the  railway  com- 
panies, and  the  traders :  — 

TABLE  A. 
Board  ok  Tkadk  Cumulative  Scale. 


CLA3M, 

For  first  M 
miics. 

For  next  30 
mile.s. 

l.SOrf. 

For  next  60 
niiicg. 

For  rcniiiinder 
of  distance. 

c 

i.aoii. 

1.20d. 

0.70d. 

1 

2.20 

1.85 

1.40 

O.UO 

2 

2.C5 

2.30 

1.70 

i.;.r. 

3 

3  10 

265 

1.75 

l.(!5 

■1 

3,  GO 

3.15 

2.20 

1.80 

6 

4.30 

3.70 

3.25 

2.30 

♦Lord  Balfour  of  Burleiffli,  Prorisional  Order  Hills  Hejiort,  IKOl,  Part  I., 
p.  411'J.     The  terminals  are  uniform.     See  Ihid.,  p.  liv. 

tFrom  Provisional  Order  Bills  Report,  1891,  pp.  Iv,  Ivi. 


t 


THE  KNOLISll   liAIDVAV  liATK  (QUESTION        817 


ot 
in 


TAUI.E   B. 

Railway  Companirb'  Cumulative  8oalk. 

Alleged  to  he  the  Ei/uleulfnt  of  the  Normanton  Scale. 


CbABI. 

Kor  tlmt  20 
lulleH. 

Kiir  next  30 
mllui. 

For  next  SO 
miles. 

For  remnindcr 
of  dlitance. 

0 

2  40d. 

l.SOd. 

1.10(1. 

O.Wd. 

I 

'.'.80 

1.70 

1.00 

1.20 

a 

3.00 

2.B0 

1.80 

1.70 

8 

3.30 

2.80 

2.40 

2.20 

4 

3.00 

3.40 

3.00 

2.(10 

5 

4.no 

400 

3M 

a.  78 

en 

in- 


ter 


TABLE  C. 
Tbaueus'  Cumulative  Scale. 


Class. 

Forflrstao 
nillM. 

For  next  80 
miles. 

For  next  60 
iiilles. 

For  remainder 
of  distance. 

0 

1 

2 

3 

4 

8 

lid. 
1| 

a 

3 

3i 

lid. 
U 

u 

2 
3 

Id. 

U 

li 

U 

2i 

2» 

Id. 
1 

u 

2 

ai 

The   above  tables  contain  exclusively  suggested  maxi- 
mum "  conveyance  "  rates. 


I.. 


OLD  MAXIMUM  RATES.* 


Coal,  coke,  etc.  (now  Class  A): 
Up  to  50  miles  .... 
Beyond  50  miles    .    .    . 


Per  Ton  per 
Mile. 


IK 
id. 


•  From  the  leading  Act  of  the  London  and  North- Western  Railway,  lfi46 
(9  &  10  Vict.,  c.  204).  Cf.  also  Hunter,  The  liailway  and  Canal  Traffi.  Act, 
1888,  Loudon,  1880,  p.  142. 


318  QUARTERLY  JOURNAL  OF  ECONOMICS 

Per  Ton  per 
Mile. 
Heavy  goods  (approximately  Class  B) : 

Up  to  50  miles lid.  to  lid. 

Beyond  50  miles Id.  to  lid. 

Heavy  goods  (approximately  Class  C) : 

Up  to  50  miles 2d. 

Beyond  50  miles lid. 

Higher  goods  (Classes  1  to  5): 

Up  to  50  miles 2id.  to  3id 

Beyond  50  miles 2d.  to  3d. 


NEW  MAXIMUM  BATES. 
Cumulative  Scale  i-iiorosEn   nv   Board   of   Trade  and   now 

ADOPTED.* 

Rates  per  Ton  per  Mile  In  Fracliuns  of  Id.  (,'  vents). 


msi 

tna 

T.JS 

■^ 

♦J 

~  3 

~  3 

—  3 

u 

1" 

"2 

1- 

•3 

5« 

■a 

s 

"C 

t;C 

"S 

«H 

a  . 

to  — o 

«  £,4> 

N 

at? 

^1 

m 

2&g 

£•3 

ii 

SS3 

Sfe3 

feS5 

feS 

SS 

b 

p^ 

ta 

u. 

en 

Class  A,  minerals,  etc.,  exclu- 

sive of  charge  for  trucks  .    . 

0.95(J. 

0.85d. 

0.50d. 

0.40d. 

3.00d. 

Class  B,  including  trucks    .    . 

1.60 

1.20 

0.80 

0.50 

Class  C         .    .                ... 

1.80 
2.20 
266 
3.10 
3.60 
4.30 

1.50 
1.85 
2.30 
2.65 
3.16 
3.70 

1.20 
1.40 
1.70 
1.75 
2.20 
325 

0.70 
0.90 
1.35 
1.65 
1.80 
230 

Class  1 

Class  2  

Class  3     .            .            ... 

Class  4     

Claas  S     

*  Provisional  Order  Bills  Report,  1891,  pp.  1,  liv,  Iv. 

James  Mavor. 


